if i am reading it clearly, i want it to be on the record that one of them was to finalize actions and better document reasons. we have all made statements. my point is that i understand as the president has directed secretary of treasury to act that you have also taken to a higher level of the criminal investigation. can you put that on the record? i want to make sure you have not taken this lightly. this is a federal criminal investigation. >> that is correct. as of friday of last week, i ordered it from bill investigation be begun. >> do you have any limits on that? >> as i indicated in risk bond, the facts will take us wherever they take us. >> in testimony before the senate, you were asked about the shield law and protection of

the press. my recollection is you said you supported? >> it was during my confirmation and it continues to be something we should pass. >> let me ask unanimous consent to put into the record the letter from attorney general coal to mr. pruitt and ask unanimous consent. >> without objection, the letter will be made a part of the record. includes work that was done to get information before proceeding as they did? the we be able to believe justice department holds the protection of the first amendment. trying to get questions yes or no. >> the justice department has ruled that has rules and regulations that will be followed about our interaction with the press. >> the chair would advise all of

the members of committee that we have 28 members awaiting the opportunity to ask questions. the attorney general will be generous with his time, but he has an obligation later today. the chair recognizes the gentleman from california, mr. issa, the chairman on oversight and government reform. >> i want to start by playing a short voice recording if it comes out ok. callingis tom perez you at 9:00. i got your message. ,he main thing i wanted to ask i want to make sure the declaration memo you sent -- it does not make any mention of the

memo on the merit of the cases under review. the main thing i wanted to talk about. i did talk to david last night. if you will give me a call, i want to confirm you've got this message and you are able to get your stuff over to the civil division. >> mr. attorney general, that thomas perez, one of your deputies are ranging for something not to be disclosed as part of his quit pro-quote in st. paul. do you think it is appropriate for someone at a federal level to keep information out to disguise what is actually going on? >> i'm not sure i agree with

that characterization. i am not familiar with all that happened -- >> let's go through a hypothetical that is a little easier. case that's going to gain the united states people $180 million and another case you don't want to go to the supreme court. you trade those cases because you don't want to have it happen and then you tell somebody you would like to keep things quiet. is that right or wrong? a whole variety of reasons why we at the justice department decide not to be involved in the cases. to talk about a case going to the supreme court for a dollar damage case great >> one has to look at this in its totality -- >> i will take it as an ok that

it's ok to do the trade. >> mr. attorney general, i need a yes or a no before you go into the long dialogue, otherwise i'm wasting my time. $180 was a trade of million worth of revenue to the american people in return for dropping the case your justice department did not want to go before the high court, to coin the phrase is used, bad facts make bad decisions or bad law. i understand you or mr. perez did not want things going to the supreme court, but let's go where we are today great >> the decision not to go through the false claims did not make the case. >> you may say that, but the plaintiff did not see it that way. think it worked out well as i understand it, but the case was not open -- the case is not over --

>> a case going to the supreme court was over. the supremeng to court was over as a result. >> the decision was made not to pursue that case. >> the american people were denied the highest court considering the case. that is an undeniable fact. >> that is incorrect. >> we will let the people decide whether they were denied a supreme court decision. tomas perez falsely stated none, thenee that one, then 35 e-mails that violated the federal records act. , that allowed us to see in camera the to and from on these e-mails. we have not seen the content, but

great >> mr. chairman, have a parliamentary inquiry. >> the gentleman will suspend great >> i would like to know, i have been on this committee for more than i would like to count. was there notice given of this recording? i have not in the life of the time i've been in this committee -- is this a hearing -- i will be happy to yield. thenotice been given -- gentlewoman will suspend and the chair will answer a question. there is no requirement under the rules of the committee that a member cannot use evidence before the committee as a part of the hearing. >> mr. chairman, if i could clarify. >> i would be happy for the gentleman to do so. >> that recording was produced

by the justice department. it was a piece of evidence that came from the attorney general, so i hope playing back his own evidence is not unreasonable. may state aewoman parliamentary inquiry and that's all because the gentleman from california has the time. >> i do understand and i appreciate that. are you saying evidence can be presented, but the question i was asking is was the attorney general given notice that this would be played. >> there is no requirement under the rules of the committee that a witness begins in evidence or notice of evidence that may be presented to the witness at the hearing. >> continuing my further inquiry, as i think i heard the gentleman from california make a point. has this been authenticated as the actual true voice for the individual who was allegedly on it? >> thomas perez has owned up to

this being his voice. >> if i might continue -- >> the gentlewoman has not stated a valid parliamentary inquiry in the gentlewoman will suspend and the gentleman from california will be recognized for the remainder of his questions. that i have two minutes to conclude. point of order? >> the gentlewoman will state her point of order. >> mr. perez has authenticated generale, but is the authenticating his voice by answering the question customer >> the gentlewoman will suspend. that is not a parliamentary inquiry. >> i demand a regular order. point ofewoman's order is not well taken because there is no such rule that would require this committee to treat this like we were in a trial. to ask an opportunity

questions of the witness and the gentlewoman -- the gentleman from california will continue his line of questioning. >> thank you. our investigators have seen 34 of the 35 admitted e-mails that violate the federal records act. contente not seen the and they have not seen the remainder of the 1200 e-mails. my ranking member joined in a letter requesting we have the full content pursuant to our subpoena of all 1200. will you make them available based on our bipartisan request? >> i will certainly look at the request. it is not something i have personally been involved with. must have been a good reason why the to and from parts -- >> you did not want us to see the details.

'm t going to stop talking. you have characterized something -- >> will you inform the witness to the rules of the committee. >> the way you conduct yourself is unacceptable and shameful. >> the gentleman has the time and may ask the questions he deems appropriate. >> thank you, mr. chairman. , one of e-mail headers them was to melanie barnes, the mystic policy council. in other words, it was to the white house. one of them was to sarah pratt at hud. that is germane to our discovery, but it was to an aol account. twotions went on between individuals, both of whom were circumventing the federal communications act. thomas perez has yet another non-government account that he uses for government use.

in addition to his verizon account, he has an rcn account. would you agree to make all of this available to us since it violates the federal records act and your own rules question a legitimateit is use of congress as we would have it. before your answer, if you would, please, and ap case, you have appointed ronald mentioned u.s. attorney. can he be considered to be independent when in fact this congress hold you in contempt, he was the individual recused on your orders to prosecute the case. if he will obey your orders of not living up to a contempt of congress, can we believe he is in fact independent? >> this are chairman, i would ask for regular order. >> we have a regular order. the gentleman's time is but the

attorney general is allowed to continue. >> his time ended 45 seconds ago. >> i did not order him to do -- i won't characterized it as a contempt finding from this congress. he made the determination about what he was going to do on his own. with regard to the e-mail request, if your request is for relevant e-mails that have to do with the subject matter you are looking at, that is something we should consider with regard to the entirety of his e-mail. if they'd don't have anything to do with the matter at hand, i'm not sure why they should be turned over. >> mr. chairman, point of inquiry, when congress issues a or when the justice

department issues a subpoena, is it a decision of the recipient as to what is germane or it is a decision of the subpoena authority? that is a question beyond the scope of this hearing. >> we have a few lawyers present. >> we have many lawyers present, and it is the opinion of the -- if the respondent does not agree, it will be appropriate for the court and we hope the court will decide the appropriateness of that subpoena because it's disappointing this has not been responded to and that congress found it necessary to take the ction that it took. >> i was just a portion of the hearing. you can watch all of the testimony online. there will be more hearings coming up this week. on tuesday, lois lerner will

appear before the house oversight committee. she is the irs official who disclose tea party groups application for tax- exempt status. also, a former irs commissioner and the current acting director, stephen miller, who has thegned, as well as treasury inspector general. irs and treasury officials testified before the house. if you missed their testimony, you can go back and watch them online at the c-span video library. there was a news conference on capitol hill about the irs targeting conservative groups. michele, mitch mcconnell, and representatives from tea party groups spoke for about 45 minutes.

>> thank you for being here. my name is michele bachmann. am a member of congress. i am a chairman of the tea party caucus in the house of representatives. and a former tax litigation attorney for the irs, as will government to repeal obamacare. this is a momentous day. one week ago today, we held a hearing in the house of representatives on benghazi. questions were asked one week ago today. one week ago tomorrow, we found out devastating information again, the irs apparently used for political purposes information about people's beliefs, whether they were religious beliefs, or political believes, potentially to deny people their tax status if a had believes that were against the ministration.

and we learned that applications were approved -- subsequent to the original story, we had an omission from the iris that they in fact made these decisions. this is extremely troubling. the axiom is the power to tax is the power to destroy. now with the implementation of obamacare at hand, and knowing that it is the iressa -- the irs will be the enforcing mechanism for this new entitlement program, it is important to ask, and reasonable to ask, could there be political locations regarding healthcare, access to healthcare, and denial of healthcare? will that happen based on a person's political believes? these questions will be considered out of bounds one week ago.

today, these questions are considered more than reasonable. and more than fair for the american people. what you will hear our state tories of common people from across the united states and wanted to be able to access their free speech rights as american citizens, but they were denied those rights because their tax status was denied in order to be able to speak out as an organization. we collected an impressive group of individuals that have very important things to say to you today. we have members of the united states senate, house of representatives, the most poorly we will hear from those people who were victimized by this administration, and this administration's policies. what -- i like to ask mitch mcconnell to come to the podium. thank you. >> thank you. as eric wilson from kentucky is here, i first heard about this

issue from him in the summer of 2012. i made a speech about the threat of the federal government using the apparatus of the federal government to quiet the voices of critics. at the time, the washington post and others said it was just a red herring. now we know it really happened. these horror stories of the government attempted to quiet the voices of critics is rather rampant. it is interesting to note that the iressa apparently -- the iressa gateway left wing group information on one of the conservative groups before their tax status had even been established. this is runaway government at its worst. who knows who they will target next. it is going to be a complete and thorough investigation of this

in congress. the only who may have known about it, but what the rank-and- file believed was their mission. the truth will come out. it always does. it can out sooner, but we will find out what happened. >> thank you. next cap senator rand paul from kentucky. >> there is something profoundly un-american about targeting your political opponents. whether you are republican or democrat, or independent in this country, to take the abuse of a $3.8 trillion government, and to use it to stifle opposition, is un-american. i'm a physician. i'm quite worried about the privacy of medical records. i am worried that your medical records now will be evaluated by the irs, that seems to have the ability and intention to use

political persuasion and political op-ed to search out political opponents. i'm concerned about this. someone needs to be held responsible. someone needs to be imprisoned. someone needs to be prosecuted. the resignation of the -- the resignation is a step in the right fraction. we need to know who wrote this policy. they need to be held accountable. but thank you. that goes to the white house. we need to know what the white house knew, and when they knew it. we have with us senator mike lee from utah. , these events that have gotten attention over the last few days, irs, ap, benghazi, tend to confirm our worst fears about our government. they didn't tell us what we don't want to believe, but might be true -- or -- a government is targeting you. the government is spying on you.

your government is lying to you. we need your member that this isn't just an act of a democratic administration attacking republicans. it is much more than that. this is an act of the political ruling class in washington, regardless of affiliation, targeting the american people. we have to remove that when the federal government gets too big, it becomes unmanageable. i agree wholeheartedly with what david f -- david axelrod said. he said that the federal government is too vast for the president united states to control. to manage. he is right. no one can manage something this big. therein lies the problem. our federal government was great for purposes that james madison described as few and defined. it has become a government without limits, without an.

no one can manage a $4 trillion annual government. no one can manage a $5 trillion government. we need to roll it back. we need to return it to a simpler, more manageable government. that is the only way we are going to be able to prevent things like this happening. when that happens, nobody's going to manage the whole thing effectively. in that happens, if people are going to be targeted. we need to sympathize our laws. we need to downsize our federal government. thank you. >> a man who has been peerless and asking the tough questions, senator ted cruz. >> thank you. i would like to begin by thanking michelle for organizing this. taking a french me house for your leadership this very important issue. and thanking the minimum and who have come up here to join us today.

-- and thanking the men and women who came up here to join us today. the thousands of hours devoted of their lies to try to turn this country around. thomas jefferson told us when government fears the citizens, there is liberty. when citizens for the government, there is to rainy. the last couple of weeks we have had a series of revelations, which share common elements. the queen -- between benghazi, and the pressuring of private companies to support political efforts to support obamacare, the unifying themes in those patterns are number one and arrogance and view of government, the machinery at partisan ends, he told the place to punish political enemies. and a disdain willingness to mislaid, and ecb american people.

i think the american people need every right to expect matter. they are here because they are working to try to hold their elected officials accountable. that is exactly their prerogative in the constitution to read protected in the bill of rights told every one of us accountable. the idea that the federal government would be targeting citizens, and particularly looking at speaking out, exercising their right to speak the truth, they would be subjected to special harassment, special targeting. it seems to me there are questions that need to be asked, including who knew about this, who didn't act to stop it, whose favor was being curried doing this? one of the stories i've read on the iressa -- irs was a taxpayer

if the federal government is being made to behave as an arm of the political partisan campaign apparatus, we are losing the constraint that the constitution has meant to put on our government. i am thankful for our citizens here today who hold all of us accountable. >> thank you. he also have with us a significant number of members of the united states congress. commerce been joe barton, jim bryan stunt, -- congressman louie gohmert, congressman randy hultgren, congressman steve king of iowa. congressman doug lamborn,

congress and james lankford, congressman ted poe. congress and ted walberg, and commerce and jeff duncan, among others. we want to present to you real people who have been affected by the decisions by the iressa, and who knows who else, to attack the liberties of the american people. diane? >> hello. i'm presenting lawrence county tea party. we filed 4501 c4 status in june of 2010. we heard nothing for over two years. writing for the election, we received medication from the iressa requesting linking amounts of information.

-- we received lengthy amounts of information requesting information. we comply as best we could. they wanted more information. we sent more things in. that ended march 5. we still have not deceived any word from the irs. almost three years later, we are still in the dark as to whether we are being approved for status. we live in a free republic. at least i thought we did. we live in a free republic. at least we thought we did. when you think of obamacare being implemented and 61,000 people added -- i have a very simple solution to this. let's abolish the irs and have something like a fair tax that would make things much simpler

and remove this problem. let's repeal obamacare. thank you. [applause] >> thank you, diane. also a tea party leader from across the united states of the ohio liberty coalition. >> thank you. we are here today not to represent ourselves or even the tea party people from around this nation, but we are here to represent all of the american people who want what we all want, and that is our constitutional rights. we want their freedom of speech and assembly that we are entitled to under our constitution. this irs targeting is demonstration of us being denied that. we're grateful to our purpose and it is for taking this on and trying trying to find out the truth of this. the wheels of justice are turning. they will find out.

we want to put faces to the stories. a woman was asked -- we want you to meet a man from the cincinnati area. he and his wife are personally audited because the irs said they were members of the tea party. the whole problem is too much government. it is too large. the real heroes are the moms and pops and aunts and uncles around this country remember and stood up and did not need to be told what was right or wrong. we know that this is wrong. go to local tea party website and take another look at the tea party. we are standing up for the rights of everyone. thank you for representing us. we would not have got here if it

were not for them. thank you. >> thank you. [applause] we have with us next a woman who's the head of the tea party patriots. [applause] >> the irs veneer of impartiality is shattered. the irs must be audited. tea party patriots insist on independent, transparent, outside and thorough investigation because the irs cannot be trusted. the justice department is suffering from extreme lack of credibility as of the moment. tea party groups have been waiting for years for the irs to treat us fairly and equally. instead they have singled us out and discriminated and persecuted

government agents have used the irs as a weapon to silence speech and harass innocent americans and perhaps sway elections. it took over a year to get answers from the inspector general's investigation, which was sparked when questions were asked in march of 2012. the answers in this week's report served to raise even more questions. for instance, who in the irs began targeting groups? why were we targeted? we still do not have answers to the most basic questions. all tea party roots groups and patriots have seen corrosive and deceitful coverups and contradictions. in the past week, that is coming out to the media and the american public to see as all.

the damaged the irs has caused might be immeasurable. there are groups and volunteers who gave up collectively petitioning their government and others who never even attempted to apply for tax-exempt status because they saw what other citizens were enduring. there are some for whom the irs is still stringing along. the public is rapidly losing faith in the irs and its ability to impartially apply the law in an equal and fair manner to all citizens. it is easy to dismiss theoretical, faceless groups. the pain and suffering by the government upon our fellow citizens is real and profound. tea party patriots brought as many of these groups to d.c. as

time would allow. we stand with patriots. they believe they lost 100 members as a result of the overbearing nature of the irs inquisition. they still have not received word from the irs. juliett hodges from the mississippi tea party withdrew their application after months of delays designed to intimidate americans. the irs question her and her group, asking for a list with every book the group had read and a book report on each book. this is clearly excessive. we also join all those across the country who have felt abused and threatened by the irs. tea party patriots has not back down and we will keep fighting.

if you want to start a tea party group, sign up with the tea party patriots. we will help you. we will not allow the irs or any branch of the government or any government agency to take away our first amendment right or any of our constitutional rights. the irs is thuggish and discriminative. this illustrates why you must have a government that is constitutionally limited. we must have a government small enough to manage and execute its duties confidently and with integrity. most importantly, the government we the people can trust. that is what tea party patriots has fought for over the last four years. >> thank you. [applause] it was feared because it was an organic and spontaneous uprising

against big government, against the bailout, and against the stimulus and against obamacare and dodd frank. this is a spontaneous movement and one administration obviously wanted to silence. it is important to know what the tea party is. they stand for three very simple american concepts. number one, we believe the american people are taxed enough already. we believe the government should not spend more money than it takes in. number three, we believe american government should follow the constitution of the united states. that is what the tea party believes. we will be hearing from the tea party express. is she here? jordan from the american center of law and justice. >> thank you.

i want to say it thank you to congresswoman bachmann and members of the congress were standing with people like tom. got approved a little bit after the election. another is still waiting. 16 clients out of the 27 we have represented are here with us today. 17 clients ready to sue the irs and bring legal action. if they are approved by friday, we set it to a new deadline for approval for our 10 remaining clients. even if that deadline is met for them, we have common others who are not able. they lost memberships and donations. they missed the election cycle. they were not able to bring speakers in. the irs, this is far from over. 28 withdrew.

zero were denied, but 28 withdrew. they were tired of fighting with the irs. the organization was destroyed through this process. many are willing to start fighting again. this is far from over. if any organizations are interested in taking legal action, whether approved late or not approved, go to aclj.org. we can represent you and we do not charge for our services. without our 27 clients and the other groups that spoke out, do think we would have figured out this was happening a year ago? if they do not fight back, they would have withdrawn. those people who got these questions from thers

thank you. i'm not dealing with this. what books are you reading and are you thinking about running for public office one day? is is unconstitutional and illegal. our members of congress will find this is criminal. we have clients who are damaged whether they got approved two and a half years later and others are still waiting today. one applied in 2009 that has still not been approved. thank you for taking on the irs. >> thank you. [applause] and now mr. todd. >> good morning, everyone. my name is todd. i'm a founder of the tea party.net. about 3 million members. thank you to the press for being here.

covering events like this, the irs scandal is a pattern. it is not an isolated event. this is why we started to party organizations over three years ago. we have seen the patterns of this happening. this is the house of cards beginning to fall apart. even with the press, with the seizure of phone records. this is an american issue. the tea party was one of the organizations that was targeted. we were targeted. we applied for a 501(c)(4) over three years ago. today we have not received the status. we have had three rounds of questions. the first round was accessible and normal, but then the questions got longer and more intrusive. they wanted things like our

donor list and e-mails and facebook communications and twitter communications. we have over 2 million people on facebook. this is private information. it makes a chill go down your spine. why would the government want this personal information on american citizens? we are not about to give that information to them. it is not required and we will not provide it. getting back to the government seizing records, i went to be the first one to welcome the press as part of the tea party movement. welcome. [laughter] [applause] >> we have mr. adam brandon. >> good morning, everyone. two different reporters asked me what are the implications for

2014. i do not want anyone to misunderstand. this is not a short term, political issue. this is a civil right's issue. this is a long-term issue. it will have an impact far beyond the next midterm election. one thing you will see we have been trying to do is not just be a protest movement on the street. as a group we have been trying to organize a get together -- a get together in our communities. the fact that the government is going in there and messing around with it, we are very concerned. this is not a short-term. expect to hear a lot more about this as time goes on. i'm personally curious -- is

this coming from the white house? from the agency? or is this individual people of bureaucracy on spring break gone wild? it'll probably take take us a couple of years to figure out. everyone standing behind me, we will be there. [applause] >> thank you. this is the largest expansion of employees and one of the largest entitlement programs that people have seen in decades. it is crucial that we ask these questions now when the most sensitive, personal information healthcare information -- would be centralized in a national database. who will have access to the database? for what purpose? sensitive information can be used to blackmail americans.

this question would have been considered unreasonable and out of bounds a week ago. today this question is highly relevant. we also have a guest from the tea party.net. >> thank you. i'm a chief strategist at theteaparty.net. 40 years ago, the press had an adversarial relationship with the chief executive, richard nixon. today is different. some might say it is casual. folks coming in from obama administration. people coming from the media into the obama administration. some people have said it is incestuous. perhaps what is most disgusting

is the degree to which many of you and the established media have taken your marching orders from the dnc and other operatives. after the tea party revolution in 2010, many of you projected the most vile things about the tea party, that it is racist, which i found particularly ironic. [laughter] there are no grounds for dismissing the pathology of the tea party. i want all of you to ask a question about yourselves -- what did you do to help create this environment with the irs where they can operate in such a way? we do not ask for special treatment. we only ask for decency and fairness. thank you.

appreciate it. [applause] we have a number of other leaders from across the states. from california, tennessee, oklahoma. all across the united states. they can tell you the stories they have heard. paul broun from the state of georgia. tea party organizations have been adversely affected. we have a number of members of congress, all of whom are available to speak with the press afterwards. we have so many people here with so many stories. we can be here for a long time. we want to open up and take a few questions. i want to make it clear that members of congress are here and available to answer your questions and be in leadership or tea party organizations from

across the united states. i encourage you to speak in person with members of our congress and to party organizations. they have a lot of shocking details and stories to share. >> do you think the problem is fixed since the president let someone go? >> my colleague is part of the media. he is asking some of the questions. you're asking a great question. he asked that yesterday. the president engaged in damage control 101. he wanted to stop the story. he has had a bad week this week. what we saw again is where they're asking for the resignation and it looked like it was going to be a big shakedown by getting rid of mr. steven miller of the irs. we find out mr. miller was scheduled to resign anyway and leave the irs as the early part

of june. again, the american people have not been told the truth. what did the white house know and when did he know it? we will open up to questions. >> any legislation planned to address this? >> right now we will have hearings. various chairs have indicated that. but there is legislation. ever presented from ohio was to put in criminal penalties for those who abuse -- because of the very sensitive nature, it is wrong for the irs to misuse personal tax data. we have very strict requirements that we could not act without the area of jurisdiction. we have very thick manuals for standard operating procedures.

we had to check every box. it did not matter if you are an attorney or in a field or in collections or if you were writing the notices of deficiency. it did not matter. your work product was checked by your supervisor and you could not ask beyond your jurisdiction. reporter: [inaudible] >> what was asked was, do you have any reason to believe the administration knew about the targeting? that is what everyone wants to know. were they involved? that is why there will be a question e-mail to the president united states. what he needs to say is that he and his a ministration of the fully cooperative with the united states congress so we can restore the american people's trust and credibility of the irs. >> earlier this week we heard the word impeachment of talks around during capitol hill.

is that something that should be considered? do some of you feel like that should be considered? >> i will let anyone come to the microphone to answer that. as i have been home in my district in minnesota, there is not a weekend that has not gone by by someone says to me, michelle, what in the world are you all waiting for in congress? why are you not impeaching the president? he has been making unconstitutional action since he came into office. i will tell you what i have been hearing from people back all. but is there anyone here that would like to speak on that? >> that is why we need an investigation. we need to know who started this and why and when. is it only contained to the irs or does it go further? >> we also do not want to jump to conclusions. we want to go where the facts can lead us.

anyone else? >> can you talk about why did party wants the government's recognition -- why the tea party wants the government's recognition? jordan? alan? he will answer that. thank you. >> what is the question again? >> why do tea party groups want any kind of recognition from the government? particularly tax-exempt status? >> i think you're making an assumption that is not correct. the organizations vary. most of them are not political. most of them are interested in policies. that is permitted for organizations. >> thank you. >> this is really an important point for the american public to understand. we did not seek 501(c)(4) status.

where businessmen, farmers, teachers. we're doing the prudence thing. we started taking bus trips to washington, d.c. you need to have money and insurance and take care of your business. we did the prudent thing. in a pre-citizens united world, we learn you cannot be a corporation a cousin we do not have the ability to do these types of. it was considered a political thing taking a bus trip. what happened was when we started to say what we do, the irs told us we must seek it. they told us we must seek tax exemption. the tea party people, we pay our taxes. >> i would add this. all of our clients voluntarily subjected themselves to

government oversight. they are not rogue. they want to do the right thing. we are subjecting ourselves voluntarily to not just government oversight when 10, but for the rest of our existence. all of the forms that have to file. they want to do the right thing and say, here i am, government. here's the monday -- money we are spending and here is how we're using it. it was the irs who illegally targeted them. this is harassment at a level that is certainly a civil suit worthy and possibly criminal. it is at least a civil suit. they will be filing next week. even for groups got approved after the election. a criminal investigation is series -- serious and real. it is the whole country that is

outraged. >> we have another who would like to add just -- address that question. >> our motto is to educate and inspire and empower the american people. we need to tell them about what is happening to their country. that way they can make a judgment when it comes to election day which direction they want the future our country to go into and what opportunities for their and future generations can have. we're trying to put forth the principles of the united states constitution on which this country was founded and became the most successful country and envy of the world in the history of mankind. our political activities are severely limited under the

guidelines of the 501(c)(4). we adhere to those guidelines, but we still receive an egregious eight-page letter from the irs asking for every minute detail and turning over our donor names, sponsor names, and our funding has dried up because of this. membership has been hurt because of the irs has asked for every member name. it is outrageous. >> we have amy cramer who is also a national tea party leader from the tea party express. she also wants to speak on this important issue. >> thank you. thank you to all of the members and others that are here today. this is an important issue that obviously i think we are scratching the service. i reached out to the speaker's office and the senate.

it was a targeted effort that was popping up all over the country. i'm glad it has come into the light. we all need to stand together and not let this be brushed under the rug. this is a violation of our first amendment rights. that is a fundamental part of being american. the government works for us. we hired them. this is an abuse of power. it is concerning. the irs is abusing their power. they have a class act lawsuit. what will happen to our medical records when they are implementing obamacare? this is not acceptable. we need to stand strong. thank you for holding this today. >> do you have a number on the status of those turned down? >> some have withdrawn and some are waiting.

i want to go back to the question of why were you seeking legal status? have you heard what has happened? you have a government that is forcing people to get a legal status in order to come up here and have their voices heard. once they force you into this final of having that legal status, then they use that to intimidate and abuse to prevent opposite views from being heard. this is a government run amok. if the ap has taught you anything, to the media -- you will be used for a while and then when you're no longer needed, you'll be pressured and put out of business as well.

this is a very dangerous time. it is interesting question. why would you want legal status? this is the way of tyrannical government perpetuates itself. we live in a free republic. at least we thought we did. when you think of obamacare being implemented and 61,000 people added -- i have a very simple solution to this. let's abolish the irs and have something like a fair tax that

would make things much simpler and remove this problem. thank you. >> president obama spoke with reporters in rose garden about the irs scrutiny of conservative groups. his remarks came during that ian assure you

certainly did not know anything about the ig report before it was leaked to the press. to the press. typically, the reports are not supposed to be widely distributed or shared. they are part of a process everybody is trying to protect the integrity of. ascribedns that were are unacceptable. we will hold accountable anyone in bald in this. we willmake sure that identify any structural or management issues to present -- to prevent something like this

happening again. i am looking forward to working with congress to fully investigate what happened, make sure it does not happen again, and also look at some of the a bunch ofreate ambiguity in which the irs may not have enough guidance and not be clear about what exactly they need to be doing and doing it right so the american people have the confidence that the -- laws are being appeared are being applied fairly and evenly. in terms of the white house and reporting, i think you have gotten that information from mr. carney and others. . the minute ithis found out about it, mind -- my

main focus is making sure we get the thing fixed. i think it is going to be sufficient for us to be working with congress. they have a whole bunch of committees. there.ig's they have done a not it. it is my understanding they will be recommending an investigation. attorney general holder also announced a criminal investigation of what happened between -- a criminal investigation of what happened. between those investigations, i think we will figure out who was involved, what wrong. and that ultimately is the main priority i have. but also the american people understand we have got an agency that has a our most potential power and is involved in everybody's lives. that is why it is treated as a

quasi-dependent institution. that is also why we have to make sure it is doing its job scrupulously and without a hint that somehowhint they are favoring one group over another. i amsaid yesterday, outraged by this, in part because -- look, i'm a public figure. if a future administration started to use the tax laws to one party over another or one political view over another, obviously we are all affected. it does not matter whether you are democrat or republican. you should the equally outraged at even the prospect that the withight not be acting the kind of complete neutrality that we expect. i think we are going to be able fixt. we are going to be

able to get it done. we have begun that process. we will keep on until it is finished. >> on friday, outgoing irs -- stevener told miller said that bullish mistakes were made. a regulator said that he did not find evidence the irs's decisions were motivated by politics. they both appeared before the house ways and means committee. the program against at the swearing-in. >> do you solemnly swear or affirm the testimony you are about to give is the whole truth and nothing but the truth,, so help you god? >> i do. >> let the record show that the witnesses answered in the affirmative. i think we will wait for the atres -- for the camera

this point. thank you. i would like to welcome j russell george, who has been the director for tax administration since two thousand two and mr. stephen miller who is currently the acting director of the irs. thank you for being with us today. you will each of five minutes to submit your testimony. you are recognized for five minutes. >> german camp, ranking member 11, members of the committee, thank you for this opportunity to discuss oversight of groups that appeared for tax-exempt status. initiated based on concerns expressed by members of congress or cause taxpayer

allegations they were subject to unfair treatment by the irs. addresses three allegations. first the the irs targeted specific groups. that they delayed the process for these groups applications and that the irs requested unnecessary information from groups subjected to special scrutiny. all three allegations were substantiated. the irs accused inappropriate criteria to target for review tea party and other organizations a stunner name and policy positions. 10s practice started in 2000 and continues to evolve until june 2011. as the monitor shows, the iressa was following inappropriate criteria. let me read to you these criteria held from the irs exempt organization function in

2011. the criteria included the words 9/12party, patriots, or project." yet another listing criteria included as "education of the public by advocacy or lobbying to make america a better place to live." finally, any statement criticizing how the country is being runs. the reason for these criteria were inappropriate is because they did not focus on tax exempt laws and treasury regulations. set -- for example, 501(c)(3) organizations may not engage in political campaign intervention. organizations can, but it must not be their primary activity. political campaign intervention, action taken on cap of or

against a candidate running for office. although these criteria appeared in the irs documentation june 2011, the iressa began selecting tea party and other organizations for review in early 2010. may of 2010 through may of 2012, a team of iressa specialist in cincinnati, ohio, referred to as the determinations unit selected 298 cases for additional scrutiny. according to our findings, it is the first time that executives in washington, d.c. became aware of this practice 2011.ne with some executives not becoming aware until april or may of 2012. the criteria remained in effect for approximately 18 months. after learning of the inappropriate criteria, the director of the organizations change the criteria in july 2011 to remove references to organizations with names or politics positions.

however cincinnati staff references back, but they did not include tea party or other named organizations. in may of 2012, after learning the criteria had again been changed, the executive director of rulings and agreements change the criteria to be consistent with regulations. the organization selected for review of significant campaign intervention experience substantial delays in the processing of their applications. experiencingons these delays included tea party organizations, they trade 9/12izations, organizations, as well as other organizations.

approved.had been 28 cases were withdrawn. 160 cases were still open. zero cases had been denied. of the cases still open, some had been been in progress for over three years and crossed two election cycles without resolution. approved, 31y's is were take party, 9/12, or patriot organizations. my final point is the irs requested inappropriate and hadation unnecessary questions. our evidence indicates that there was very little supervisory review. the irs later determined the questions were unneeded, but anduntil media accounts

questions by members of congress are rose in march 20 12. examples of the unnecessary information requested included listings of all issues important to the organization and what the organization's position was regarding such issue. months after receiving these questions, 12 of the 98 organizations received a letter or a telephone call from the iressa stating their applications were approved and they no longer needed to respond. the irs informed another 15 organizations they did not mean to request to previous requests for information and sent a revised request for information. regarding the donor information, the irs informed us they destroyed that information. in closing, our audit showed clear evidence that each of the three allegations were correct. usinge iressa

inappropriate criteria in its review of organizations for tax- exempt status? yes. was the irs delaying their applications? yes. and were they asking inappropriate and knows---- unnecessary questions about ?gainst? -- about applicants yes. reassured thatbe the iressa is impartial in administering the nation's tax laws fairly. , -- german camp, ranking member 11, members of the committee, thank you for the opportunity to speak. >> thank you. me tonk you for allowing be here today.

we received the notice of hearing within two days. the irs was unable to prepare written testimony. i have a brief statement before i take your questions. wantting commissioner i to apologize on behalf of the internal revenue service for the mistakes we made and the and -- the poor service we provided. the american public deserves better. partisanship or even the perception of partisanship has no place at the irs. it cannot appear to be a consideration in determining the tax exempt status of an organization. i do not believe that artisanship -- partisanship motivated people. i think what happened was there were foolish mistakes made by people trying to be more .fficient and their workload

it was a mistake, not an act of partisanship. the agency has learned its lesson. we have worked to create -- to correct issues identified in the report and we've implemented changes to ensure this type of thing never happens again. management will take appropriate action respect to those responsible. i will be happy to answer your questions. >> all right. are you still acting director of the irs? >> i am, sir. >> were you appointed by the president of united states? >> no, sir. >> when was that? novemberdesignated in of 2012. pre-k's 2012. and you hold to titles -- acting rector and the deputy commissioner for services and enforcement?

>> i do, sir. , you directapacity and oversee all major decisions with regard to the tax-exempt and government entities division? >> that is a division that reports to me, yes. >> of the website is accurate? >> yes. >> who do you report to in your positions? as the deputy commissioner for services and enforcement? >> as the deputy commissioner, i would report to the commissioner if there was one. without commissioner, i report to the equity secretary -- >> of? >> the treasury. >> is it not a violation to disclose confidential taxpayer information? >> it is. >> that really applies to all taxpayer information. >> i'm not sure what that means. >> it is not just the return -- not tore obligated

disclose taxpayer information. >> were you made aware in august of 2010 a white house official in a conference call with reporters disclose the confidential tax structure of a private company. >> i probably read in the paper, sir. >> you are made aware through news reports? it was a long time ago. greg did you take any steps? >> i do not recall. click so you did not inform the inspector general of that or your superiors that you recollect? >> i'm not sure why i would have to notify the superiors if it was in the papers. i do not remember whether we made a deferral or i made a referral at that time. >> ok. according to the inspector

general audit, the targeting of these groups began in 2010. when were you made aware? >> may 2012. >> how were you made aware. -- how are you made aware? >> i was made aware by the process in the report when i asked for our people to take a look at the cases subsequent to .he public discussion >> that would be in your role as the admitting -- the acting director? >> i was the acting director at the time. >> who would that have been? quick the senior advisor for acting government entities.

did you inform anyone of the action that you took, those steps? >> i did that. advisor to senior --k at that in march of something like that. i am sure that i inform the you informr. >> did anyone other than the commissioner at that time? >> you mean up the chain, sir? >> yes. >> the inspector general was looking at it at that time. were you aware of the iressa watching audits against ?onservative donors

that would have been in about may 2010. >> i do not recall the date, sir, but in that timeframe there were press accounts and individuals' coming in to talk about it. >> did you learn from the press or inquiries from congress? >> it could have been either. it came up in a meeting and then it hit the press. >> in any event, after learning of that information, what steps did you take? >> investigated what happened. we took a look. ultimately, we issued a directive that said the walk in the area -- the law was not that clear and we had not been in force in that area substantially since i believe 1982 or something like that that talked about gift taxes and c4 organizations. let's not in force right now.

let's talk about it and we will put out guidance and it will be pushed back. i thought that was the fair thing to do. >> when you say you investigated, who would that have been? >> i don't remember, but we took a look at the issue and how it happened. you're looking at it as well, your committee. >> when you say "we," to do you mean? >> the irs. >> what department? >> i do not know if it was an exempt organization. on not going to be able to answer with particularities. >> were you ever made aware of the confidential 2008 donor list for the conservative tax-exempt organization? >> i was. >> when was that? >> i would have to get back to you on that. >> how did you find out? >> i don't remember. it might have been the press or someone coming to us with a congressional complaint.

>> when he learned of that, did you take any steps? >> i believe we made a referral. >> you are not sure when the referral was made? >> would have been in the same timeframe. "shortly after you became aware of it? >> it would have been. >> were you ever made aware of the leak of confidential applications for the tax-exempt status of conservative groups pro public cut? again, i cannot give you a perfect time line. the approximate time it became public is when i was aware. you would know about from the time one. >> did you inform anyone else of that? >> i believe in the service informed me at the time, yes. >> in each of these incidents, did you ever come forward to

inform the congress? >> i do not believe so unless it came up in conversation or testimony. can i suggest something? on those two just to let you know, this to be the national organization -- those two situations, we went and, i think, they can speak to what they had found, but we made the referrals and, i believe, what they found was that those disclosures were inadvertent and that there had been disciplined in one of those cases, for someone not following procedures, but i will obviously let mr. george speak to that. >> never informed the congress of any of these things that you are aware of? >> they were in the press, sir. >> all right. well, obviously, the irs mission

statement says the role of the irs is to help american taxpayers understand and meet their tax responsibilities and enforce the law with integrity and fairness to all. clearly, your mission is not being met. mr. george, i guess i would just have one last question for mr. miller. when asked the truth, you know the truth and you have the legal responsibility to inform others of the truth, but you do not share it, what is that called? >> i always answer questions truthfully, mr. kemp. -- mr. camp. all right. mr. george, were you ever made aware of the alleged disclosure of the confidential tax structure of a private company? >> we have been alerted. >> you're personally made aware? >> in specific for in general? >> you specifically. >> to a specific company or in general?

>> there was a disclosure of taxpayer information. the confidential tax structure, any information, is considered confidential. it was particularly the tax structure of a private company. were you made aware of that disclosure? >> we are made where public disclosure that is protected by title 26, yes. >> are your the incident by referring to? >> i am aware of that, yes. >> when we made aware? >> i do not have the exact date, sir. >> how we made aware? >> i believe it cantor the office of investigations or it could have been through a hot line. i'm not completely certain. >> you do not believe you learned of that from an irs employee? >> i generally do not below the commissioner or deputy commissioner level interact with

it goes through the chain of command. >> that would include the commissioner. no other employees informed you of disinformation? >> it would have come from one of my principal deputies in may had received information from someone, not that the commissioner level, but maybe at the deputy level. >> your not aware and you cannot tell us for sure? >> at this time, i cannot. >> we made aware of a confidential donor list of the national organization for marriage? >> i have read in the newspaper the allegations to that effect, but i have to make it clear, mr. chairman, the at the internal revenue code has very strict rules as to the way that

confidential tax payer permission is revealed. i have to be very careful as to how i respond and whether i can even acknowledge publicly some of these revelations you are inquiring about. >> did you respond to that information? >> a review has been taken. >> is an ongoing? >> i would have to confer with my colleagues if you give me a moment. >> is an ongoing? it is not. >> there are daily reports of irs misconduct and it's clear more work needs to be done. is your office continuing to investigate the allegations? >> yes, we are. >> mr. levin is recognized. >> thank you very much. i want to go on to other things. the incident that mr. kemp has been talking about, the disclosure, what years were

those? mr. miller? >> i apologize for not having the date at hand, but it has been a couple of years now, i believe. >> the was the commissioner at >> i believe it was mr. shulman. >> who appointed him? >> mr. bush. >> ok, let me start with two key issues. there's no question about the inappropriate criteria. i wanted to focus on that. let me first ask the right up front, if i may, mr. russell, during the course of your audit, were you allowed access to anyone requested to interview? >> to my knowledge we were not denied access to anyone.

employees in cincinnati and both d.c.? >> yes, we did. >> they stated they were not influenced by any individual organization outside the irs. is that correct? >> that the information we received. >> did you find any motivation and the tax-exempt notification? >> we did not. >> during your review of this matter coming you indicated when you had started, did you find any evidence of political motivation on the part of employees involved in processing the applications of this this year? >> we did not, sir. >> if we could put on the organizational chart, is that

possible? is someone going to do that? it is called high-level organizational report. mr. miller, the inappropriate criteria that singled out applications for tax exempt status was developed by what office? >> it would be developed by an office that is actually not on here but is under lois' lerner's jurisdiction. >> where are those employees located? >> for the most are located in there are a handful of people around the country he

report into cincinnati as well. >> they found the director of exempt organizations on this chart, which is not on the screen yet, but this is as her position became aware of the inappropriate criteria. she ordered the criteria changed and it was changed in 2011 to no longer refer by name, "tea party or patriot." is that correct? >> yes. >> as then deputy, were you aware of the criteria in june- july 2011? >> i was not. >> in january 2012, the criteria was changed again to "organizations involved in limiting expanding government, educating on the constitution and bill of rights, and social economic reform movements." the ig report indicates this was

made in the cincinnati determination office without executive approval. mr. george, is that correct? >> yes, sir. >> it was changed without executive approval? >> that's our understanding. >> the may 2012 criteria today states organizations with an indicator of significant intervention. the ig report states that it more clearly focuses on the activities permitted under the treasury regulations. is that correct? >> that is correct. >> i have no further questions. >> i yield to the chairman of the oversight subcommittee. >> thank you, mr. chairman. on march 22nd, 2012, the subcommittee held a hearing in

this room and i specifically asked the then commissioner shall men about reports that they have been targeting tea party and other conservative groups and i would like to play the video of his response. could we have the video? [video clip] >> this is the kind of back-and- forth that happens when people apply for 501c4. >> this was march 22nd, 2012. knowing what you know now, was his response truthful? >> it was incorrect, but whether it was untruthful or not -- when you talked about targeting, we should really get into this, because when you talked about targeting it is a pejorative term. and not defending the list. what happened here, and by one

like to go through the application process, is that someone saw a tea party cases come through and there were the knowledge and that they would be engaging in politics. this is the timeframe in 2010 when citizens united was out and there is a lot to discussion in the system about the uses of c4. there was discussion about centralizing and grouping these cases. the way they centralized it is the concept of centralization is not. they are not targeting people in that sense. what they're doing is making sure that they are putting them in -- >> let me ask you this. you said "incorrect but not been truthful." was he not informed of this process? >> to my knowledge, i do not think he knew at the time. you set the technical adviser to cincinnati. there were press reports and

there were notices from chairman camp and myself dating back to 2011. and you are saying he was not informed of this? >> let's divide this into a couple of pieces here. there was the processing of the cases. we were aware there were issues in the processing of the cases. we were not aware of the lists. i asked in late march, after the hearing, for us to go in and take a look. i thought there were problems and they came back with both pieces. there were problems with the cases and the listings. >> were given a briefing on the improper selection based on political belief and everything was, i think, may 3rd, 2012. >> that correct?

so i would recharacterize your question. >> i was informed of what we had been informed of to date. tigda was in there and there was a use of the list. the list seems obnoxious to us, as it does to you, and we are going to take action. that was in may. >> you say it was not targeting, but was only one side of the political spectrum singled out? >> look. they get 70,000 applications in 4150-200 people to do. -- for 150-200 to do. they triage them into a mix to get technically fixed up and some go for substantial of questioning. politics is an area where we always ask more questions. it's our obligation under a lot to do so. as mr. george indicated, a c3

cannot and a c4 can do some. >> we have received letters describing process and we're trying to get to the heart of this letter. you were told tax-exempt organizations were being targeted they contained terms like tea party, we the people, and so forth. knowing these practices can be sent letters to congress of knowledge. our investigation of these allegations but consistently omitted that such discriminatory practices, that are allegedly, are in fact taking place. why did you mislead congress and the american people on this? >> i answered the questions as they were asked. >> why did you not tell us about the terms? >> the time has expired.

>> mr. george, you are the inspector general at the treasury? >> correct. there are three inspector general's in the department of the treasury. i am exclusively for the irs and the system of tax administration. what's your appointed by then- president bush. >> correct. >> you were appointed by then- president bush. >> your report was no outside groups were involved. >> as of now. >> was the previous commissioner? >> douglas schillman. appointed by then-president bush? >> correct.

>> he was commissioner when these outrageous activities were going on, which both sides of the aisle recognize as outrageous. prior to commissioner shulman, the last political head or political appointee of the irs was mr. mark everson, is that correct? he was also appointed by president george w. bush. it is believed that groups like the naacp, progressive churches and environmental groups were targeted by the irs. mr. miller, while you were appointed acting commissioner at the irs, you are a career civil servant. is that not the case? >> yes.

>> you are not a political appointee. >> i am not. >> what i'm trying to basically basically debunk is the notion or idea -- tryin gto debunk are the nonfactual statements by chair camp to link these candles to the white house or solely targeting of conservative groups link these scandals to the white house. i asked the questions of ms. lerner last week as to whether or not the irs was investigating political not for profit at that hearing we were not given an answer. she got involved after she was asked a question at a press event and that is simply

unacceptable. what i also think is important, at least at this point in time, i would hope is in a bipartisan context because we want to find the facts. we want to find out who knew what and when and what steps were or were not taken. i was just as outraged when i was learned when she was asked the question why she did not tell congress. i asked her and she did not answer. we are outraged. i did not believe any political organization should be targeted because of their thoughts. that's on both sides of the spectrum. i would dare say during the prior administration by mr. shulman and mr. everson that there was targeting a political

entities as well. it has to end on both sides. the president has been very forthright and very strongly condemning that type of action. the entire administration has as has mr. lew. let's get the answers. ask the questions, get the facts, and then we will draw our own conclusions. i yield back the balance. -- mr. brady is recognized. >> thank you for getting to the truth in this scandal. let's look at one of the tea party groups in my community. the founder, a small businesswoman, applied for tax exempt status in july 2010. in february, 2012 she received a letter with numerous follow-up questions that were intrusive but she answered every one of them and return them well within the two week time frame.

three years to the day that she first filed, her application is still pending. let's look at what happened to her in the three years since she replied. beginning in december 2010, she was visited by the fbi domestic terrorism unit. her personal and business returns were both are edited by the irs -- both audited. she received four inquiries and business received unsolicited audits, and questioned audits by osha and the atf twice. this is a citizen and a small business woman who had never been audited by the irs or any of these agencies until she applied to you for tax-exempt status. there's a broader question here is this still america?

is this government so drunk on power that it would turn its full force, its full might to harass, intimidate, threaten an average american who only wants her voice and their voices heard? mr. miller, who in the irs is responsible for targeting conservative organizations? >> i cannot speak to a given case. we talked about 6103. >> this is not just one case. you know we are talking about the whole list the inspector general put up there. who was responsible for targeting these groups? >> again, i take exception to the context of targeting because it is a loaded term. the listing was done -- >> this is not a listing. you created a beyond the lookout

list. it is not a centralized or mandated listing. you had a "be on the lookout" list and the inspector general already verified. who was responsible for targeting these conservative organizations? >> again. if you read the report, it answers your questions. >> there are no names in the inspector general's report. so i'm asking you not only of the acting commissioner bud the deputy commissioner of this organization who is responsible for targeting these individuals? >> i do not have names for you. i'm willing to try to find that targeting, again, is wrong. >> you have no knowledge of who >> i will stand

by what has been put out as fact. >> can you of knowledge none of this shared or given to many other federal agency? >> that would be a violation of law and i do not believe it happened. >> you can assure us there was no sharing of this information? >> tigta will look into it, but i would be shocked.shocked. >> if your earlier answers are any indication, we will all be reading about it in the media. we are to be getting the truth from you.mr. chairman, i yield back. >> mr. wrangell is recognized. >> we are all out raged by what has occurred under the bush as well as obama appointees. >> there were no obama appointees. i apologize. i'm not sure -- water talking about?

>> once it was discovered that people were put on a book out list, that type of thing, regardless of what you call it, were the people responsible in the treasury department appointed by president bush as well as continuing service under president obama? it is basically the question you have already been asked. >> at the irs, the commissioner was appointed under the bush administration. at the treasury, those individuals would be obama appointees. >> the outrage is not democrat and republican. the president has indicated outrage. you have indicated outrage.

i would assume we are on the same side in trying to determine how this happened, who was responsible, how far does the cancer go, how quickly can we cut it out? so that tens of thousands of irs employees have this stigma of corruption taken away from them and that you, mr. miller, a career employee, does not have to explain to your kids and friends that you are not involved in a scandal, that all the people who serve the government -- it's too late for the congress, but it's not too late for the government to try to get its reputation cleaned up for america. i don't want to see anchor, but i certainly hope before this hearing is over that you share with us how you intend to have

intend to have your voices heard so that america would know that whether this was criminal activity or a mistake, i don't know, but we have to get on with it. under 501c4, you can make political donations and without saying how much and who made the donation, right? >> under 501c4 organizations, donors and their contributions are not public intermission, is that is the question. >> you can make political contributions?>> you can make a contribution to a 501c4 for political purposes. >> and can do that as long as it did not the primary purpose. it can do that for 49% of whenever the activities are without technically violating

the law. is that correct?>> the test is whether your primary activity is social welfare in nature. >> you could be 49% political. >> we have never been that precise. >> you could say that.>> yes. >> after the supreme court decision in citizens union -- citizens [laughter]enever. the application for this type of corporation increased dramatically, did it not? >> they did double. >> he did not have to be a political expert to realize there was an increase in political donations given to 501c4's. >> if you look at the reporting on forms 990 on political activities, it will show an explosion of money there as well. >> again, it's almost an

invitation as the law is written for abuse in terms of political activities for corporations are primarily are supposed to be doing social service work. is that not correct? >> it is something we have to look at closely. >> you should have wanted to look at this earlier before what my friends are calling a scandal. it's wrong to abuse the tax system. this screams out for tax reform, does it not? >> it is an area ripe for redefinition and reform. >> regardless of whether republicans or democrats did something like this, the outrage should still be there. >> outrageous to -- yes. >> this law has been abused by government employees. not by all of them, but by some and our job is to find out who they are. all i want to get from you, mr.

miller and mr. george, because it is your integrity on the line, the president, the administration, the irs employees who work hard each and every day. and unfortunately the congress is involved. people are losing confidence and i hope that you feel the same sense to find out what caused this, how could happen, and to help us restore confidence that americans should have in their government. i yield back the balance. >> mr. ryan is recognized for five minutes. >> mr. miller, we have now established and you have the knowledge that you were briefed on may 3rd that there was improper criteria used for tax- exempt applications. you were told that tax-exempt applications were being targeted the they contained terms like tea party, we the people, bill of rights, and those criticizing how the country was run.

after that, you sent letters to congress acknowledging our investigation of the allegations but omitted that discriminatory practices were allegedly taking place. this briefing was made in 2012. then, you came here to a subcommittee hearing on this issue on july 25th where we were investigating the discriminatory filters to hold up the 501c4 applications of groups, specifically told that these groups fell like they were being harassed and you're asked this question. "what kind of letter or action is taking place at this time that you are aware of?" knowing full well these were used to target certain groups you said, "i am aware that some 200501c4 applications fell into the category.

we did a group these organizations together to ensure consistency, to ensure quality. we continue to work those cases." that was your answer to this committee after you had received a briefing that the targeting was occurring, which you already of knowledge was outrageous. the law governing how he must respond to congressional inquiries requires you to tell not only the truth but the whole truth. you cannot conceal or cover-up by any trick, scheme, or device a material fact. how is that not misleading the committee?you knew the terms tea party and patriots were being used. you just admitted they were outrageous, yet when you're asked about it after you were briefed, that was the answer you gave us? how can we not conclude that you misled this committee?

>> there were a lot of questions there. >> it's one. how can we conclude you did not mislead the committee? >> i stand by my answer is then and i stand by it now. that implies political motivation. there is a discussion going on. there is no political motivation. >> let me ask you again. >> may i answer the question? >> let me give you some clarity. hear the question you are asked. what kind of action is being taken place at this time that you are aware of? >> the discussion of the context of that, and again we need to go back to look at the context. there with a listing and the treatment of cases. mine understanding is that the treatment of the cases, because all the letters that they were talking about, i'm hearing that people are complaining about letters. we have dealt with them as have

been explained and we went to them to talk about the ways they could answer it and we delta, i think, fairly and successfully you knew issue.>> of our concern with the targeting in the allegations reported to the committee. we brought you here to talk about it. -- you knew of our concern. you said in your answer that you were aware of some that fell into the category to ensure consistency and quality. you did not mention targeting based on of buzz words like tea party, patriots, or 912. do you not think that is a very incomplete answer?

>> i answer the question truthfully. >> you give us a list the other day of approved tax exempt applications for advocacy organizations through may 2009. we do not know how long these applications sat or how long it took to process them. just from mr. rangel's question in earlier testimony, the irs was doing this because they're concerned about political actions by nonprofits. some of these approved art chattanooga organize for action, progressive leadership alliance, and progress of usa. if you were concerned about political activity, did you have targeting lists that contain less like "progressive" for "organized" in their name? >> let's take a step back and i walk you through the process. we centralize cases based on evidenced intivity. the file. we take a shortcut on some of it, but we collect, to be blunt,

more than a tea party cases. mr. george's own report -- >> there were no progressive buzz words used. >> we collected more people because any time it was seen that political activity was part of the file -- >> time is expired. mr. mcdermott is recognized. >> thank you, mr. chair. these days, congress does not seem to agree if the sun is shining but this issue has brought us together. we all agree that these applications were orally handled. -- were poorly handled. them to a hold higher standard. the irs is an easy target. everyone wants to get a pitchfork when the tax man comes. but in the honey 47 media cycle,

it is getting harder and harder to get to the facts. there is a difference in my mind between stupid mistakes and malicious mistakes. the overwhelming majority of farexemptions were from right groups, and examiners took a shortcut, which they clearly regret. deeply regret. the report says black-and-white on page seven, the determination employee stated for the tea party right. handshort time -- short term for all political cases. these terms were singled out not for activities, which is really what they should have been singled out for. some of these political groups were late getting taxpayer status and that was wrong.

as much as i dislike i dislike the right, i think it is wrong to the i'm evenhanded and government applications. inspector general report says no one acted out malice or political motivation. mr. george, i want to know. do you still stand by that? >> we have no evidence at this time to contradict that assertion, sir. >> we want to root out the causes of this. we talk about campaign finance laws, citizens united, the decision of 2010, which is when all of this started. it started right after citizens united. people saw the door open. can doget in, we political advertising and we do not have to report anybody's name. the applications increased fourfold after that supreme court -- this small group of people in the cincinnati office screwed up. no one can deny that. they simply screwed up. but the congress, this committee

messed up by not giving any clear criteria for what a real charitable organization is. exactlynd figure out what people are up to. withly, there is a problem our way of determining what an organization' s primary purpose is, and i want to ask you about that, and i want you to think about that while we are talking about it. finding out what is right and wrong and fix it, to the irs saying let's repeal it. we could have repealed that along with obamacare yesterday. is partinded that it right and part wrong. it is also about republicans story line. we need to find the truth here.

the irs cannot access your medical files. it is that true? >> correct. >> they cannot find out your private medical information. >> that is correct. >> their job in obamacare is to simply collect paid financial information on which a determination is made on whether somebody can get a subsidy for their premium. is that correct? >> -- >> it is not a fascist takeover of what is going on here of the health-care system. let us not forget that the virus is one of the hardest and most hated jobs and there are thousands -- the irs is one of the hardest and most heated jobs and there are thousands of hard-working americans who work every day to run the system. a couple of people make a problem. that does not damage the organization, in my view.

you get rid of the people who make the problem. i would like to hear, mr. miller, what he believed would makeat would you need to it so that this would not have happened before? >> there are two things, sir. i appreciate the kind words. we are a hard-working and honest group, frankly. that seems to be forgotten in all of this. with respect to political activity, it would be a wonderful thing to get better rules, to get more clear rules. in terms of our ability to get to this work, it would be good to have a little budget that would allow us to get more than the number of people we have to do 70,000 applications and do our job in looking at whether or not an organization is tax exempt. >> time is expired. >> thank you, mr. chairman. mr. miller, do you know the director of the irs is presented as the position of los

lerner? -- lois learn? were you aware she did not acknowledge the investigation at the time? >> i did not know that. >> were you aware that the irs was preparing a statement to put>> yes. i did not know whether we knew it at that time not. >> what did ms. lerner know when she testified before the committee? what i do not know that. >> did you know that ms. lerner was going to appear last may 10, on a panel called "news from the irs and treasury of the american far association conference." >> i did not know the topic. i knew she was appearing. >> did you or any of your support and its director to make any of the public >> it was a prepared q&a.

ps? >> do you know the member of the irs is advisory council on tax amenities? >> i do. >> was she questioning mr. lerner about targeting conservative groups. >> i believe we talked about that. yes. >> did you have any contact, either by e-mail, phone, or in person, with the white house regarding the targeting of tax- exempt groups from 2010 to today? >> i did not. absolutely not. >> how about the department of treasury? >> i would have had some conversations with treasury in my role as acting commissioner because i reported to them. on this topic it would have been -- i have to look back. i believe that conversation would have taken place

>> how about president barack obama's reelection campaign? >> no. >> did you have any contact with organizing for action? >> no. >> did you have any contact with anyone associated with public cut?" -- with pro-publica? >> when this whole thing came out i think the irs might have talked to them. yes. >> something that would probably clarify your involvement in this would be if this committeeo your e-mails, phone records, and 2010 schedule until you resigned. would you be willing to do that? >> i will see what is legally appropriate. >> we could subpoena those records. >> i will have to talk to my agency.

i am saying i do not know. you are asking me and we will talk. >> i would suggest that we work hard to get those records. i would also encourage you to contact your colleagues to testify before this committee at their earliest possible time. i just have one last question, mr. miller. you really are not taking any acknowledgment that you knew anything or did anything wrong. you said that numerous times on the record today, you did nothing wrong. i find it hard to believe -- are you resigning? >> i never said i didn't do anything wrong. what i said is contained in the questions. i resigned because as the acting commissioner what happens in the irs, whether i was personally involved or not, stopped at my desk.

i should be held accountable for what happens. whether i am personally involved or not -- those are very different questions. >> i hope you would be willing to submit all of your e-mail, phone records, any personal meetings you have had in the past four years, i think that would really keep your reputation in good standing with this committee and the american people. >> we will have to talk about that. i am not saying no. i just do not know. >> thank you, mr. miller. back my time, mr. chairman. >> mr. neel is recognized. >> you reference it -- thank you. your referenced an article from "usa today." their democratic leaning organizations that were the focus of the irs as well. >> without objection. >> thank you.

curious about what the word of the day would be. termave rejected the "targeted." is that correct? >> i think it is a term that implies something that did not exist. >> by sheer irony this morning, they used the term "litmus test," which it defined as a single factor as an attitude or event that is decisive in choosing these organizations. test? wasould you say that there a litmus test? >> if it was a litmus test it was political activity. >> i have one of my constituents who contacted my office yesterday, outlining a pretty egregious situation. he is treasurer of a small nonprofit in massachusetts, a volunteer organization. i should note. their association was told by

the irs employees that they were not required to file a 49- 90. this past november they received a letter saying their tax-exempt status was revoked without the proper forms without any defense notice. longer told and they no needed to file the forms but instead of notifying them first of the problem and allowing them to fix it, especially in light of the id by steeper given, the irs went ahead and revoked the tax-exempt status. they now have to reapply and pay. this is a nonprofit that has been around for 60 years. a taxpayer should not be intimidated by the irs. there is broad agreement by that. the american people should not be afraid if the irs. there is broad agreement on that today. we should rely on the advice they apply. i hope we will have the opportunity to work in this specific and central issue. i want to turn to the topic of recent focus by the irs.

questionbviously the today, the allegation that there are political views that have cost them to be that focused. we all know that is outrageous and acceptable and a thorough review will get us to the bottom of this to ensure that never happens again. let us not forget something this morning, even with the egregious actions that have been acknowledged by the irs there is still an underlying problem here, and that is 501(c)(4) being engaged with politics. after citizens united, the irs was flooded with applications seeking 501(c)(4) status. why is that? because large part superpacs must disclose their donors. the others do not. we have many disagreements on this committee between this and the parties. we should be able to agree on

that whole notion of disclosure. the case that unleashed a torrent of money in public life was in 1976, which the court held that money was enabled in speech. the caveat included in that opinion, while never fully acknowledge, probably written by justice brennan, quote, "the suggestion -- disinfectants, sunlight. electric light, the most efficient policeman." as part of our scrutiny as think we all ought to be able to agree based on this problem here today that the simple act of transparency and disclosure would alleviate much of what has happened here. they weren't this rest because they wanted to join the sisters of mercy in common cause. for the purpose of engaging politics.

it was not to hide the donors. i am hoping we can get to the bottom of this in fuller context. let me ask you this, has anyone been disciplined directly related to this development review approval and use of inappropriate criteria? and have any corrective actions and ticket is to ensure this does not happen again? what's the answer to that is yes. -- >> the answer to that is yes. in may when i was told this i asked the management there to reassign an individual who had been involved in these letters that were objection. i also was aware that -- as i mentioned in my statement now that they are out with the will be able to look again.

i should not just because -- i have to be careful here. the oral accounts and ang may not have been involved so what was done in lieu of that was all the managers in that group were brought in and walked the new processes and explained that this was no way at the irs. in terms of the future, the anding cannot be done cannot be changed. >> thank you. >> thank you, mr. chairman. in january 2010 an organizationd keyed liberty township party in ohio applied for tax-

exempt status. there is no resolution to their application. they received 35 questions that i have in front of me in march 2011. really, there were 94 questions when you look at all of these of questions. copies of all activity on facebook and twitter, estimates of all past and present employees, whether a past or present employee or their family members plans to run for office in the future. i would like to submit a copy ky party in ohio applied for of the article from yesterday that references this. in the article, and " a board member from the liberty township -- i quote a board member from the liberty township party. actually in the audience today. "we are an educational staff. staff.ot have a paid we do not take a stance. we cannot endorse candidates, we do not man phone banks. we do not do any kind of political activities." mr. miller -- >> without objection the

article to be placed in the record. >> question 26 of the questionnaire to the tea party group is as follows, "provide details regarding your relationship with justin thomas," an american citizen in the audience today who does not know why he was question no. 26. the dispatch article goes on to say he was shocked when he found out that the irs is questions about him of a group that he barely knew. he was involved in a cincinnati tea party and served as a spokesman. the obvious question that comes to mind are why am i being targeted amongst all of the others? where does this information go? does it get shared with other government agencies? do i get an audit? is it against my business? all of those things go through your mind. now, to this day, he does not

know why his name was question organization who still hasn't received approval since january 2010. now, the article goes on to say the democratic gov. ted strickland, a former governor of ohio, filed for tax-exempt status in august 2011. they were approved nine months later. mr. miller, another organization in ohio, the high liberty coalition. -- the ohio liberty coalition -- this is their documents in response to irs request. this is only part of it. all of these documents were not enough for the irs to approve their application.

in fact they applied in june 2010. they finally received approval in december 2012. one month after the november election. another young lady and net in the group -- another young lady i met in the group indicated her group had a book club and the irs listed all the books they had read and a book report from the group. you cannot make this stuff up. this is unbelievable. i do not know how you can defend any of this and i do not know how you can say this is not political when the liberal group got a tax-exempt status three did not mention for over two years.

who was mr. lerner's boss in 2011? who did she report to prove>> i believe it would have been -- >> ingram? >> in other gentleman. -- part of that time, and part of that time, another diamond. >> he has since submitted his bride is a nation -- since submitted his resignation? >> when she did today? >> she works and the affordable care act? >> who proved her to that -- who promoted her? position? >> i approved it that position. >> why would you move her to a position which was in charge of the exempt division when there has been controversy? >> we did horrible customer service. whether it was politically motivated or not is a different

question. know this day, he does not why he was question no. 26. >> time is expired. >> thank you for your testimony. let me tee off with something you just said. he said foolish mistakes were made. i think the president said it better, "the handling of those tax applications at the irs was outrageous and intolerable." no excuse. as much as we know that the folks at the irs have a thankless job because they have to go and tell their fellow americans that they may be audited or they have to do this work understaffed. -- do this work understaffed we have to maintain confidence in the system.

>> agreed. >> you are right, it was a foolish mistake. the president is even more correct in that it is outrageous and intolerable. let me focus on something you said. when you're asked if there was any finding or evidence of political motivation you said no. >> that is correct. >> would find is a situation -- what we find is a situation where an excusable activity took place. -- were inexcusable -- where inexcusable activity took place. i think it is unfortunate for those who are in positions of authority. where you have to have the standards, it has to be there. at the irs. has to stop somewhere. work beedone by anyone in

the irs. i hope you understand it you are here today talking to us because we need to get to the bottom of this. we need to clean up and clear up some can go back to the business of making sure people respect the fact that we have a voluntary system of paying taxes. let me ask the question of mr. geroge. in your report you indicated, that "there appeared to be some confusion by the determination cnet specialist and applicants on one activities are allowed by internal revenue code or by 501(c)(4) organizations. tobelieve this could be due the lack of specific guidance of primary activity a a 501(c)(4) organization. they should have social welfare as the primary activity of their mission. however, the regulations do not

define how to measure whether social welfare is an organization primary activity. the question, could some of these delays have been avoided if there were clear guidance on sex 501(c)(4) organizations -- on section 501(c)(4) organizations? the direct answer is yes. i should note that the determination to it did seek clarity from washington headquarters and it took months before they received a response. >> that is a great way to leave it to mr. miller. what we have been saying for quite some time, many of us, is that there is not clarity in what is social welfare.

you have many see for organizations, these non-profit organizations, who are trying to do good work. they are being painted by some of these organizations doing nothing more than political activity. the supreme court gave the license to use a nonprofit status to do politics. is the law clear in your mind on what is political campaign activity? >> it is very difficult, sir. nope. >> can you distinguish between sections 501(c)(4) and a 527 political organization? >> that is difficult. presumably the level of political activity and expenditures needs to be less the 501(c)(4) area. >> let me suggest to you to go back in your opportunity with fellow employees at the irs and mr. george your capacity as inspector general, thank you for your service, to please communicate that you need to give us your sense of what is

the best guidance. we do not have this proliferation of organizations that are abusing the nonprofit status at taxpayer expense so that we will not run into this situation again and the american people can have confidence in their system and government. i yield back. >>mr. reichardt is recognized. >> thank you. i have about 15 minutes to question me but i only have five. i am disappointed. you did not even know who investigated the case but he said it was investigated. i am puzzled by that. of are not instilling a lot confidence in this panel and

the people across this country. i want to go back to your version of the word "target" or "targeted." no targetinge was because there was no intent. would you not agree that certain groups were treated differently because of their position?licy >> i believe -- >> where they treated differently? that is the question. >> no. >> that is a yes or no question. >> no. >> no one was treated differently? >> may i answer? i would like to to be broader than a yes or no. i understand your view, sir. my understanding is that the cases that went into this queue

is that it included elements for a political spectrum. that of the 300 cases that were looked at by the treasury inspector general 70 of the 300 had "tea party" in the name. >> i am going to take my time back. it is my time. i am not going to be delayed him. your answer was no one was treated differently. to take back to mr. ryan's question, you knew the groups with the term "tea party" had automatically been suggested to -- subjected to extra scrutiny. you have admitted that today. yourould acknowledge investigation as to whether groups were being treated differently. whether there was intent or not. didn't this committee have the right to know? >> i added all questions -- answered all questions truthfully. >> didn't this committee have the right to know that groups were being treated differently?

you had this group of 200 or 300 -- did not this committee have the right to know. >> i answered all of the questions i asked. >> your answer is a non-answer once again. it is an easy question. do you not think the congress has the right to know all the does this committee have the right to know the information that you knew it? yes or no? you testified before this committee. mr. miller, you testified before this committee and you did not provide the information. you did not share the information you need. -- knew. my question is do not believe -- this is the united states congress that you are accountable to which is

accountable to the people and american citizens across this country -- do you not believe that it is your job to provide us with the information that you knew so that as you said the people of this country can be properly served honestly? you are a law enforcement agency. i was a cop for 33 years. you raise your right hand today. right to know what you knew? yes or no. >> i answered all questions truthfully. i will also tell you -- >> i am going to mr. torch if you are not credit cooperate with me. you have been -- mr. george if you are not want to cooperate with me. mr. george, we heard in the early draft of your report indicate you are unable to determine who cost the irs to target groups based on their political beliefs. is that true? >> yes. >> you are the commissioner, who

is responsible? >> i do not have that name. sir. >> why not? have you ask anybody >> yes. >> who did you ask? >> i did not have that name. >> it is the gentleman from washington state's time. >> who did you ask? >> i asked the senior technical adviser. >> what his his name? >> nancy. >> what did nancy tell you? who is responsible? >> i do not remember. >> you do not remember again? >> time has expired. the committee will recess for 15 minutes. [gavel]

[gavel] >> the committee will come to over -- order. if every one will take their seats. recognize 145 minutes. mr. chairman. what happened here is outrageous and inexcusable, and unless those of us who strongly disagree with the tea party on many issues defend it from any impairment and allow it to be as wrong as can be, we -- democracy. many charges have been made this morning. you, as inspector general have a statutory responsibility as inspector general to prevent and detect fraud and abuse in the programs and operations. >> i do. >> to the best as i can see, you

have filled this ability. let me ask you if using the extensive audit and investigation power to have as inspector general if you have found any evidence of corruption in the irs. >> no. >> and let me ask you, if you have found that our tax system is rotten at the core? picking who wins or loses. in statements that were made, very inflammatory charges at the beginning of this hearing, it is obvious that it has no basis in fact, at least not a fact that has been demonstrated yet this morning. it is important to address and

fully correct one ronda we not be involved in other wrongs, hawks such as the proliferation of this, not just the position of the democracy with that money but that they beat tax subsidized, secret, corporate money, that we not permit those who have a fundamental disagreement with the progressive tax system using this incident as a basis for shifting even more of the burden of financing our defense and our essential government services on to working people, that we not permit those who have an agenda that has now been voted 37 times to try to undermine the full and effective implementation of the affordable health care act so that the health care crisis is ended for families across this country. that is wt here that is what is discussed here. it is not based on any fact

associated with this investigation to this day. as indicated by the republican appointed inspector general whose job was to determine whether or not any of these charges had merit. let me move to an area where i disagree with some of my colleagues in their comments this morning. i do not believe there is any lack of clarity in the statute here. the statute that is in effect has been in effect for decades, and it requires that before asere is tax exempt status, the group, citizens for responsibility and ethics in washington has pointed out in a petition, you are to be denied this status if you are not exclusively engaged in social welfare, according to the statute. is that not correct? the statute is explicit. it uses the words "exclusively."

what the irs adopted years ago and uses different language. thatt is addressed to me, is a tax policy question, and i am not in the position -- >> i am not asking you for tax policy. i am asking you for a clear reading of the statute and a clear reading of the statute that has been in place for decades about whether or not there should be a denial exempt status for any group that is not exclusively engaged in social welfare operations, and it was only after this was adopted long before any of you were at the irs to change exclusively primarily that there is not a discretion for them to be involved in this. >> we have indicated that some clarification from those in a policy area of the department of the treasury might be needed in

this area to help clarify again. >> in april, citizens of responsibility and ethics in washington filed a petition with the treasury department and the irs to address that. if the statute, the clear wording of the statute, had been followed, we would not be dealing today with selective enforcement. we would not have any problems with enforcement in this area at all, and i hope that petition is honored and responded to properly. i believe you have fulfilled your responsibilities, mr. george, as this position. and thank you, mr. miller, for stepping aside. >> another is recognized. >> mr. miller, you may object to the word targeting, but it is used in the report 16 times. it is a common understanding of the word, so i would suggest that it is part of the doctrine

and we do not waste a lot of time parsing on that. you spoke to others about the questions before hand. can you tell us more about that? them it not speak to about the possibility that now that the report is finalized, now that we knew all of the facts, now that we had responded in writing and everything was done, did it make sense for us to start talking about this in public? >> you thought it would be a good idea to make a public disclosure to the american bar association rather than coming in following up on your duties to disclose that to the house? >> we were going to do it at the same time. our intent was to talk to you all at the same time. >> but that did not happen, did it? >> it did not, i do not belve. >> what other recollection do you have about talking to the scheme in question?

>> i am not sure what you're asking, sir. >> i am asking what is your recollection of that conversation. >> we talked about what was said and how we might do it. >> where did the conversation take place? >> i believe it was over the phone. what day it would that be? >> i would have to look at my notes. >> you have notes on that? >> i would have to look and see. >> why would you say you have notes? >> i do not know. >> ok, let's shift gears. you engagedile ago, on the question as to whether you knew this committee, this whole idea of having the right to know this information, and then you sort of shelter yourself in this idea that i have always told the truth.

let's set that aside for a moment. now, you are a lawyer, and i am a lawyer. of know in the process discovery, if you find information, council has the duty to disclose that to the opposite party. there is no perry mason moment. there is no got your mind. there is no litigious situation where somebody comes in and says, "we are just showing up, your honor, and we have not disclosed it to the other side." do you not knowledge that you had a duty based on your testimony before this committee about what your actual knowledge was? did you not have a duty, mr. miller, to come forward and disclosed that to the committee, based on all of the inquiry is from the ways and means committee? >> sir, what was happening was i was aware of some facts, not in possession of all facts. we had done an internal review to see what we needed to do to get these cases moving because

the processing was bad. those were two different pieces we were dealing with. take those and at the same time they were getting all of the facts. we are going to wait for them to get the facts. otherwise, we would give you facts that were not correct, sir. >> so you're not concerned about the timing of the investigation when it you and she decided to move forward? >> it was done. >> it was done. >> and we had made our written response. >> so in other words, you had the actual information. the totality of the information you are describing today, you had it all in your possession at ae time which you were in scheme occurred to do this, is that right? >> i object to the term "schema." >>ot wwrtten doand manipulation, call it what you will. you had the information.

is that not right? >> we were reaching out to the committee at the same time. >> what form did that outreach take? >> , we called to try to get on the calendar. you called to try to get on the calendar. is that all you have got to prove >> that is the truth. >> ok. i find it incredibly ironic that on the one hand, you are doing today that the irs is not correct, and yet the subtext to that is that it is just, look, we are in competent. it is a perilous path way to go down. there is sort of this notion that has not been satisfactorily answered. if the targeting was not targeting, if the targeting was not based on philosophy, how come only conservatives got snagged? >> they did not, sir. walks and alll

persuasions that were pulled in. that is shown by the fact that only 70 of the 300 organizations where tea you called to party os that were the ones that were looked at. tothis is in contradiction the attorney general testimony. >> your time has expired. another is recognized. >> i appreciate rehabbing this hearing and want very much to be able to get to the bottom of this. more important, or as important, i want to make sure that we are able to do all the we can to prevent it from ever happening again, for all of the same reasons that many of my colleagues on both sides of the i/o mentioned today, and i want to associate myself -- both sides of the aisle mentioned today. how this ranks. what i would like to know, general george, first, in your testimony, you had a section

that is titled results of review. where you would say the irs used inappropriate criteria for identifying these organizations. is that legal? >> is it legal? it was not illegal, sir. criteria werete developed and stayed in place for a total of more than 18 months. was that the legal? >> it was not illegal, but it was inappropriate. >> i understand. i tried to get a sense. >> it is contrary to treasury regulations and other policies put in place by the department. >> the substantial delays, is that illegal or inappropriate? >> inappropriate.

>> and then third, the unnecessary information, illegal or inappropriate? >> inappropriate. >> ok, thank you very much. you also allied recommendations which you think are most and explain if enacted they are enough to prevent this from happening again. are they? >> the vast majority are. they agreed to the mat -- vast majority of them. >> some mechanism, some matrix or making sure that they are put in place? is there a plan to go back and review these and to continue your good work of review to ensure that your recommendations are being followed out? and that your enough to protecte citizens of our great country? >> we anticipated almost our

entire future plan. we're going to take a look to see whether the irs has successfully -- as i believe you indicated or someone did, the president indicated that he was going to ensure that the irs complies with those recommendations, and it would definitely be our intention to follow it to guarantee that has occurred. >> one of the responsibilities that we have is also an oversight responsibility. it is there something in your recommendations and in your subsequent plans that will keep us in that loop, or are we going to have to find out about this outrageous and intolerable behavior through some other means? >> mr. thompson, we publish an audit plan each year, laying out which audits we are going to engage in. we request information or

solicit ideas from congress, from the administration, and from anyone who has a tangible role and they system of taxes administration, and it is our intention to once again do that. there is no doubt in my mind but we will follow-up with congress on this matter with congress on a regular basis. >> thank you. mr. miller, what are your obligations in regard to reporting this type of behavior to congress? >> i would have to go back and take a look. i do not believe there is an obligation. was in and in may, almost immediately, when we were involved. we had a meeting with mr. george and company in may, where there is an indication they would be done this summer. our indication was that we were going to get the facts and get them out there. there was never the intention or

the belief that these facts would not come out in full. >> general george, is there a need to pass specific make ition that would more difficult or hopefully impossible for this to happen again and to strengthen the requirements for reporting of when something this outrages and intolerable takes place? >> i will answer your question in full, but i do have to begin practice but the secretary is asking tax policy questions. >> time has expired. so you can supplement that answer in writing, if you wish. another is recognized. >> thank you, mr. chairman. according to the inspector general report, the irish started its inappropriate handling of some applications in early 2010, and to swing back to some of the prior testimony and

mr. miller, you indicated that he never spoke -- excuse me. before i ask that question, let me highlight two pieces of media articles that appeared, one in 2010 as well as one more recently. in september 2010, there was an article in "the weekly standard" with an attorney that there had been confidential taxpayer information potentially in the hands of senior administration officials that were part of an august 2010 on the record background briefing. subsequently, just a few days ago, in "usa today," there was whiched with a general on it with a gentleman who release ofhat the this organization's tax return to campaign is the canary in the coal mine of iras corruption, contrary to

assertions that the targeting of tea party groups was an error in judgment by low-level bureaucrats. the release of this confidential data of this nature suggests the possibility of complicity at the highest levels in politics and government, so that is whether or not there was any information sharing, taxpayer records, taxpayer returns with anybody outside of the irs. mr. miller, you indicated some moments ago that it was communicated personally with anyone in the white house about sharing confidential taxpayer information. is that correct? >> i believe so. >> do you have any reason to believe that some point you did speak to somebody in the white house or a communique in another way with somebody in the white house about the sharing of confidential taxpayer information? >> i do not think that what happened. >> t a no, you did not? >> i believe i did not. >> are you aware of anything

about communicating with anybody in the white house about sharing confidential taxpayer information to somebody outside the irs? >> are you asking whether -- >> i am asking if you are aware of anybody else in the irs in that time if they communicated or spoke with anybody in the white house about the sharing of confidential taxpayer information. >> i do not believe so, and i am confused, sir, and i apologize, but just so you know what i am answering, but if you're asking about whether or not i shared information -- >> whether or not this is individuals, organizations, businesses, all of that information being shared with somebody outside of the ira's in violation of the section? >> i have no knowledge of that. that is a question i understand. >> you did indicate that you spoke with officials regarding the sharing of information. i am not saying the white house.

i am saying the treasury department. if i looked at that correctly, you did speak to somebody in treasury about that? >> i do not think so. again, let's be clear. speak oru ever communicate with anybody in the treasury department that was not within the irs about the sharing of confidential taxpayer information in violation of 6103? rephrase it and you tell me? >> no. >> if you're asking me whether i ever shared 61 of three -- >> i did not ask that. did you ever communicate with anybody in the treasury department about the sharing of taxpayer information? >> i do not believe so. i do not know if you were talking up the subject, which would be absolutely fine to talk to them about, or -- >> that is exactly what i'm

trying to find out. who you spoke with and what you spoke about. did you speak to somebody in the treasury department about the sharing of confidential taxpayer information? >> no, what i am saying, sir, is the following. that? you ever do >> did i ever talk to them about the sharing of -- 9 >> by email, by facts -- >> i do not believe so. i can tell you categorically that i never shared information. did i ever talk to them above the rules about it? i do not think so, but that would have been permissible. >> you are aware of news reporting on the association and the concern about the sharing of their information. you indicated on the record that you were aware of that news story. on that story or any other story, did you talk to anyone in treasury about that issue? >> i do not know. i do not believe so. >> check all of your records, all of your notes, and get back

to this committee about whether or not your answer is different that what you are providing right now. >> i have limited access. >> the time has expired at this point. andthank you, mr. chairman, think you, gentlemen, for your testimony. i think it has been eliminating and very helpful. there is an agency in the federal government that needs to no byve approach, partisanship, mistreatment, unequal treatment, it is the irs. >> i agree, sir. >> and, obviously, the optics of what happened in the cincinnati office and reviewing things, this is what comes from that. >> the perception is bad. >> it is my understanding, too, based on the inspector gen' report, try to do the best to implement that to make sure it does not happen again in the future?

>> we will implement all recommendations, and will not happen again. >> the accountability, who is being held accountable and why. obviously, you have given your resignation to the president, and he has accepted that as commissioner of the irs, is that right? >> i have done so to the secretary. >> ok. any other instances of accountability, as far as who was in charge of the cincinnati office, in the development and use of this criteria? >> i think i mentioned there were two incidences. there was a reassignment of summit. but what i said in my opening statement is we are now in possession of the facts with respect to get the report. now is the time we should be looking at that. >> any pushback from the irs with the inspector general report and some of the recommendations we are making? any difference of opinion? >> there is no air between us on the recommendations. >> is there any role for

congress to be working with the irs to make sure something like this does not happen in the future? i am speaking specifically of citizens united and 70,000 applications that were -- the c-4and being applications. >> they are not sufficient. >> of course, i do not think we will have many applications on the other side. you are sufficiently staffed in order to deal with the huge influx of applications that the virus is experiencing right now. i think there is a role for congress, and we have to share some responsibility, as well. mr. george, let me ask you. i think part of the problem is this definition of primarily engaged in social welfare, that seems to be subjected. there is no clear, bright line. i think the irs is trying to

further define that for the division in cincinnati, but is there further tightening that would be helpful for the i.r.s. personnel when it comes to review the applications? >> the answer is yes. >> is that something that needs to be done internally at the irs, where is there a role for congress to have some rules when it comes to reviewing social welfare applications? >> it is my understanding that the irs has the authority to do this on its own. >> this committee will be working with the irs to make sure that gets done. otherwise, it will be an inherently flawed human process of subjectively applying this criteria, especially with the huge influx of applications. some of this has been dealt into, and i think it is so important that needs to be reiterated. mr. george, i apologize if you think you made yourself clear on this, but you found no bipartisanship used in the criteria for selecting the

applications and the cincinnati office, is that correct? >> that is correct, sir, but we did find gross mismanagement. >> that is in your report. did you find anyone involved in the development or review? >> not at this time. >> not in the white house or treasury. >> not at this time. >> thank you, mr. chairman. >> if i am sitting at home, trying to figure out what is going on and listening to the testimony and the remarkable revelations of some of these have the federal gunflint asking what books you read, having the federal government asking you whether or not you know anybody in your organization that is going to run for political office. this is chilling stuff. this is very, very serious. do you accept the

finding of the report? >> we do. >> one of those findings is that groups were targeted. do you accept that finding? >> i would not characterize it as targeted. >> this was including the inspector generals released -- belief that there was targeting. >> they would have gone in whether we had done the correct thing. >> you describe a list of criteria being used to identify these groups as an obnoxious, correct? >> correct. >> and it is not just tea party groups. it is not just conservative groups. there are religious organizations, are there not? >> i do not know that, sir. >> are you not aware that there were religious organizations identifiedy criteria? >> i am actually unaware, and i say that as i do not know.

i looked at the list, but very quickly. >> there were some baptist church organizations listed for greater scrutiny. >> i was not aware of that. >> who is sarah ingraham? >> she is an executive at the internal revenue service that does this work for us. >> that is where she is now? >> yes. >> where did she worked from 2012? >> my prior comment. think shed 2012, i was already working on the affordable care act. a title ofever held tax-exempt organizations or the irs? >> she had a title. >> said she had much responsibility over the concerns that we have today, is that correct? >> at the time, she was commissioner. >> which she had known about this list of criteria that had been formulated?

>> i have no reason to believe that she would. >> that she would prove >> i get no reason to believe that she would. i am sorry if i was not clear. i do not think so. >> you do not think she and criteria about the folks under her responsibility? >> there were a couple thousand folks. >> have we ever had a conversation? >> no. >> you have never asked her if she knew? >> i am not sure if she was in that job at the time. >> you identified her current .osition >> you've also said that in the context of the criteria list and what we're talking about today that the i.r.s. "provided horrible service," correct? >> i think that's correct. earliers what you said

today. wasindividual who overseeing a portion of this and had responsibility for the provision of this "horrible service" now sits over the entity at the i.r.s. that will determine whether or not people are complying with the rules. is that correct? >> i don't think so, sir. >> she is is not in control? >> we would have to go back. >> i don't think your timeline works perfectly, sir. there might be a peed of time when she was still in that job but she transfered. >> in questioning you said that the i.r.s. would not have access to medical records, is that correct?

>> i believe that is correct. >> so it is unnecessary for them to gain access to medical records, correct? >> i didn't -- i think so. >> isn't that how you described the questions and the information that the i.r.s. folks were gaining through the criteria list unnecessary? >> i think -- are you talking about the letters? >> i'm saying there is a parallel here in the nature of what the i.r.s. has done. do you want to characterize the word? is it illegal? >> it is not illegal. let me understand the question. what is your statement as to what is illegal? >> do you believe it isll for employeeof the i.r.s. to create lists to target

individual groups and citizens in this country? >> i think the treasury and inspector general indicated that it might not be. >> what do you believe? >> i don't believe it. i don't believe it should happen, don't get me wrong. it should not happen. >> thank you. >> thank you, mr. chairman. i appreciate the opportunity for our being able to listen to the witnesses and try to develop a record and people putting forth their own ideas, their own question, clarification. i think, mr. inspector general, you have provided a tremendous service with the report. it is straight forward, identifying mismanagement, inappropriate activity, and i hope that people will be able to actually read the report to reflect on it. i appreciate your being here, mr. foreman miller.

it is -- you have accepted responsibility and resigned. it is a error that you don't often see in the political arena, i would say. but i'm hopeful that we can continue to probe, to direct, make sure that no political entity is subjected to inappropriate activity on of the i.r.s. i appreciate some of my colleagues talking about efforts that we can do to clarify laws and regulations together to be able to make sure that there is less ambiguity and better standards. i think at some point it would be interesting to reflect on

congress' role in what the chairman referred to in strong terms about a tax code. when i came here in the 104th congress. there were 114,000 employees in the i.r.s. since i've been here congress and its wisdom has expanded the code, made it more complex, and cut dramatically the men and women who are on the front lines to deal with it. their inadequate training budget. we had this testimony just across the capitol before the senate this last week. i really hope there's an opportunity to think about how we support the integrity of the internal revenue service, not just by making sure there's inappropriate or gross mismanagement, there is clarification but we rely on it for it to function. congress has slowly been starving the budget of the i.r.s. at a time when each of those employees dollars --

dollars spent on the employees gives the federal government about $214 in revenue and for us not make shu it is adequately staffed, adequately trained, adequately equipped invites short cuts and makes it harder to have the oversight and accountability and harder for overall performance. i think it's inexcusable to cross the line. i think it's important that we bear down, we understand, we make sure it doesn't happen again. i also think as the congress has made the code more and more complex given the i.r.s. fewer and fewer resources to administer it, make it difficult to train. i think it's -- it undermines the ability to take a complex intyty that relies on self- reporting and people having confidence in it. i'm hopeful this isn't something that we slide past. i appreciate, mr. commarme --

chairman in simplifying the code. but i also hope we look at the task they have been given, the budget they have been given and think about maybe a rate of return that would more than pay for itself if we invest in training in management, and having more than 150 people to deal with the avalanche of these applications. i guess that wasn't so much a question. but it is something that will occurred to me and i know mr. miller you have referenced the stress that group is on and how hard it is to keep track. at some point, if you would provide to the committee, not putting you on the spot now, but some reflections on what to do this right. i think it would be a valuable part of the committee record going forward. we all want it to have integrity, we want it done

right, we an to treat the employees and the taxpayers properly. thank you. >> thank you, mr. chairman. mr. miller, i want to talk about the culture of the organization as looking at the notes, your bio. 90,000 employees, $12 billion budget. you've been there 25 years. i'm concerned -- i guess to start off we got a mission statement there. i'm very concerned about the breath and the depth of what is going on. i think a lot of employees probably do a good job but i've been in business for 30 years and run larger organizations. you got a mission statement in terms of working for the

american people, doing what is right, playing by the rules, is that something that is internalized at the i.r.s. or is that something on a website? >> i believe it is irn alternativalized. the vast majority of our folk are hard working and incredibly honest people. i'm going tell you and you should hear that as these discussions occur, as, union, it is damaging to the moral of those people. we, you know, it is ultimately damaging to the sense of volunteering compliance, which under lies our entire tax system. let me just say i think there's a lot of good people, at the same time, we have a massive p.r. problem at minimum we do. it can't drag on for six months to a year but we need to get to the bottom of this. in terms of that size organization, who is in charge? whose who is the boss? how does it work? i ran a decentralized business, i had a corporate structure but i had mappingsers and partners.

-- managers and partners. you've been there 25 years. who do you report to? the commissioner in the past, who a do they report to? at what point, when something like this comes up, who is involved? >> the reporting chain and the organization is -- there are two deputies reporting to the commissioner and the commissioner reports to the deputy secretary of treasury. >> who is ultimately responsible? >> the commissioner -- acting commissioner, not the treasury. the treasury relationship is such that they would not be involved. who is responsible for you? who asked you to resign or fired you?

>> it would be secretary lew. >> the secretary of the treasury. the other thing is, let me ask you, there's been two people -- were you terminated or fired? are you getting ready to retired? i was asked to resign and i will retire. >> under what basis do you feel like you're getting asked and one other person got asked but it seems like there is other people in cincinnati and washington and other parts that have not been held accountable? >> i'm not sure what the question is, sir. if i could answer it and tell me if i'm not answering it correctly. >> go ahead. >> we're not done yet. we have the report. we have the sense of the facts. now is the time for those that remain, including the incoming, acting commissioner, mr. werfel to take those actions. >> it's been brought up with a couple of the ladies that work with you, what is being done about those two?

there's a lot of concern about them. they ran a large operation and it seems to be at the heart of the issues. i think it has to be done in an aggressive, clear way in the next week or two. >> i don't know if it will be or not. that will be up to the next acting commissioner. >> let me ask you in terms of the new acting commissioner. are we looking to gate permanent commissioner or is this -- looking to get a permanent commissioner or is this a commissioner for a period of time? >> we ought to have a nomination. >> i hope. i think at the end of the day, leadership matters. theing the right culture, right environment within the organization, the i.r.s., it needs incredible leadership, incredible integrity and we need to make sure that person, not so much the acting one, but ther permanent one is the rhtgreesir. >> thank you, and i appreciate the this opportunity. let me say a couple of things

and i will ask a question. this is not an easy hearing for you or for us. we're outraged on behalf of the american people. that is number one the american people need to deserve to trust their government. it was violated and that violation is unacceptable and outrageous to us and i hope to you. the fact there changes that need to happen, some thanks that you're making but we need to be assured those changes we made things happen, investigations have to be done and changes have to be made to ensure the american people that we know that went won't accept bias or discrimination in any way. i think that is clear to all of us. secondly, this committee and congress also has the responsibility to do this questioning and our own demand for accountability and transparency from you, the administration, from everything that happened. to do it in a way that is not politicalette. i think we have to be -- political either. i think we have to be careful about that. we need to engage in this in a way that is clear, fair, and nonpolitical. we all agree that something has to be done. my question is really about boardly what is going on in the division that happens for the application for nonprofit

status. i heard from my office that groups that came to us for nonprofit status, not c-4, is the issue here. but the backlog of a year. they don't understand why it take so long. they don't understand why they are not clear about what is wrong with their application. they are not hearing back. given some of the cuts we've made, nonprofit groups in particular but really are looking to make up stosm gaps that are here, to be able to raise money in charitable contributions and to make a difference in our communities.

i need better clarification of what is the criteria, why they don't hear back, why the applications are taking longer than a year, if there is problems with them and how we can move though process forward. i think we have every reason to ask those questions and get those kind of answers on behalf of our constituents. it goes all of the nonprofit organizations. is there reasons to review an application to a greater depth and there might well be. we need 20 understand that and

so do the people making the application. they should not be in the dark about the criteria or why sitting on someone's desk or why it is receiving more review. if you can clarify for us now, mr. miller, about what the criteria is and how we can help you to make sure you're doing this right. you're in there during the investigation and getting those answers and correcting those and i'm sure the american people have the right process, the fairness of the process, the crier the combra that is being used in a timely, appropriate responsible and process to american taxpayers and certainly to nonprofit organizations. so you're chance to that will be appreciated. >> it is a big enough question that will follow up in writing. the process right now, as i mentioned, we have a limited number of people, 140-200 that

work on the 70,000 applications that come in for tax exempt status. most of them are 051-33 organizations. they get some instances to issue bonds. they get state tax, property tax exempts, postal rate reductions. these are significant benefits in addition to just tax exemption and we have to look at them. many are small organizations that go through quickly and some are large organizations that we need to take a look at. the largest hospital systems, the largest universities, there are large organizations. then you look at issues within them. we look for, is there private benefits? is there political activity

again. c-3 no political activity is permissible. c-4, some. those are things we try to look at. we try to move them along as fast as we can. we do not have enough people. >> you don't have enough staff but you're clear of the criteria. >> time has expired. >> this will be a continuing conversation. >> mr. smith is recognized for five minutes. >> can you define political activity as relates to the agency and the applications? >> political activity has some limits. you need a candidate, you need a candidate for public office. that sort of what you need for it to be a political campaign activity under 051 c 4 and c-4. >> was it the concern of the political activity that led to

the review of applications? >> i believe it was. it was the fact we were seeing more applications indicating a they might be doing political activity and it is an area that is difficult for us. those are very difficult for us to flush out. the decision was made to get them into one group and educate those people. how they started that process was one of the problems here. the other problem here as i mentioned, was the method of processing these cases was flawed. i think the report and mr. russell's report goes into great detail in the problems that we saw in the lack of communication between the pieces of the service, the letters that were going out that were overly broad. >> how many employees at the

i.r.s. would be associated before the criminalization? as mentioned earlier, the risks were requested by the irs. that is accurate. ever ofhe acquisition the two additional further inquiries? when they hit the paper we discussed it. i will go back. this can be relevant. they should not be in every

case. relevant if the donor is a touring if for a political purpose. only saw that it happened we saw that don't send them in. said we're not going to use these. the we did not. you will not find them used in any case. maybe 30 or something. more than half of those were not tea party cases. was overly broad. it was not necessary. cases your donor list is were requested, was it your finding that a checkered

irther increase that's >> that 27 wereow listed. this was safeguards, applied. can you share whether there were safeguards in place that were not honored? whether it was bias or perception will play out over time. something on the exam said that has worked remarkably well. before anybody gets examined it goes through a committee. no one person can do this. this cuts down on the bias.

we did better job of precisely six blaming white. elevatedave done is the issue into the criteria to a higher level. >> thank you. from t party groups. the time has expired. >> thank you. i want to thank you for being here. everybody that i heard him make every revealing body that has had an opinion has suggested that there was some behavior on the part of senior level irs staff that was unwarranted, and acceptable, intolerable. it should never happen again.

also clear that there have been management challenges such as who has the authority to do what relative to policy as well as operational procedures. let me ask you. when did you start the audit? this began with a request from the congressional staff member. i want to give you the exact date. i do have that here. march 1 but 2012 is what we were initially contacted by a government reform staff member. it began with march of 2012.

we have meetings prior to that. >> when did you first learn about the audit? >> sometime in that timeframe. we were a way that they were taking a look at this. was on the ways from the beginning? occur to have ,ertain kinds of conversations interactions with whoever would be determined as your superiors ?ac but i am not sure anybody above him new. >> let me ask you.

investigation we heard all kinds of allegations. thatpeople have suggested a good thing to know is who is going to be the next person to go to jail. who is going to be indicted. use thatported to criminal any apparent intent or activity on the part of these employees? nothing out of the original review. a subsequent review on our part on this matter. >> after listening to all of the discussions and reading all the

information, i am not convinced that this is a great big political conspiracy. i was certainly it met that there has been some ineptitude. there has been some lack of serious management procedures used and adhered to. let me ask both of you since you have had considerable experience with the internal revenue service. what would be your recommendations to the new commissioner coming in at? there is no question that this is damaged the reputation of this organization. the new commissioner needs to take steps to make sure we have restored that trust that is so essential. should where he or she

take action. >> i will point out, and this is one of the recommendations that we have made, training is >> letry me begin by saying i am most impressed by clinic of the organizations seeking tax-exempt status. is the tip of the iceberg. the irs has been shattered by these revelations. they seem to be far from

complete. theirs first revealed that words two-party, patriots and others triggered scrutiny. ire revelations have come have a 150 page document given to me by the thomas more society, detailing organizations .hroughout the country they're given an abuse of power into repression of their constitutional rights. -- to submit some these, asking for a reply of this committee about the degree of abuse these ordinations -- organizations received. >> have a like to highlight a and as for your opinion on them.

in a letter from the irs this pacific coast division, this is not a cincinnati division. this is dated march 31, 2011. -- asere as specifically specifically do you do education by size of the issues? , is that anledge appropriate question to ask? >> i will not be able to speak to is this a big development letter. i do not know if i could do that. let's let me ask you about another letter. this one in iowa. askspecifically

would that be an appropriate question to a 501(c)(3) applicant? the content of one's prayers? >> it pains me to say i can't speak to that one either. >> you don't know whether that would be an appropriate question to ask? >> speaking outside of this case, which i don't know anything about, it would surprise me that that question was asked. >> and finally, during another applicant's conversation or back and forth they were askedinand forth they were asked and specifically, please detailand hespecifically, please detail certain signs that may or may not be held up outside of a planned parenthood facility. would that be an appropriate followup to an applicant? >> i don't know the context would be but that doesn't sound like the usual question. >> thank you. well, hopefully mr. george and the inspector general's office can enlighten us. mr. george, during your investigations, are you aware of the three letters submitted by senators baucus, schumer and durbin written to the irs,

asking them to give extra scrutiny to 501(c)(4) applications? >> i am aware of it but i don't know the details, sir. >> so in your investigation so far in questioning employees of the irs, did you ask them specifically whether or not these letters from sitting united states senators influenced or impacted their decisions around these cases? >> i do not believe that was part of the inquiry. >> will you ask those questions in the future? >> i will ask that if appropriate -- we will certainly do so if appropriate. >> thank you. mr. chairman, i am particularly troubled by some on this committee who seem to want to rationalize or justify the inappropriate behavior by the irs in these cases by their disagreement with the citizen united ruling of our supreme court. i think we all know that our nation is a nation of laws and

we either abide by those laws or not. to our peril. and whether we agree with the citizens united ruling or not should not be justification for this agency, which is charged with upholding the rule of law and for all people in all groups, regardless of party affiliation or motive. specifically, mr. miller, i was troubled by your comment that you found this grouping, mr. george, with the inspector general's office called it targeting, to be inappropriate but not illegal. i'm wondering if you can give me examples of other targeting within the irs that you're aware of that would be inappropriate but not illegal. >> sir, i should tell you that i don't know -- it's my belief that what happened here wasn't illegal but i suppose there are some facts that might come out that would indicate otherwise.

but it's not my area. i don't know. but it certainly was inappropriate, no question about that. i'm unaware. we have used listings elsewhere. >> can you give me an example? >> credit counseling would be one of those.where username to work in them -- where we use a name to work in a consistent and fair manner. >> time has expired. ms. jenkins is recognized. >> thank you, mr. president. we've heard a lot of outrage, a lot of anger and disappointment but i have to tell you after sitting here for a couple hours i'm sad and i'm sick to my stomach. that americans could be targeted by a government agency based on their political beliefs. mr. miller, in response to congressman nunez, you mentioned

that you had a discussion with someone at treasury regarding to report. can you give us more details about when that conversation occurred and with whom? >> so, i don't know the precise date but it would have been very recently after the report was done and i think mr. george can speak to when he indicated to some parts of treasury as well. it might have been in the same timeframe. >> would that have been the first time you had a discussion with someone from treasury about this situation? >> this situation being the listing and the treatment of these cases? >> correct. >> i think so. >> so, out of all the news reports that have come out in the last couple years, there was never a discussion at irs with treasury about the situation? until just recently? >> you asked the question was-- with this report.

and the report was described and discussed with them recently. i don't believe the specifics were described or discussed with them earlier but i don't know that. they weren't by me i don't think. >> who was your conversation with? >> i would have talked at some point to mr. patterson, the chief of staff. and subsequent to mr. george's discussion with mr. rollen. >> you spoke with who? >> mr. wollen. >> and how did that conversation go? what did treasury have to say? >> we just talked through the troubling nature of the reports. i indicated that we had worked on fixing the problem. and that's what we talked about. >> they didn't give you any advice and counsel on how to

move forward? >> no. >> ok. mr. george, how often do you meet with treasury leadership and irs leadership regarding open audits? >> with irs leadership, we meet monthly with the commissioner or acting commissioner on a standing basis and then we'll have communications as necessary. the secretary holds a monthly meeting with bureau heads and in conjunction with those meetings i meet monthly with the general counsel of the department of the treasury and as-needed basis with the deputy secretary mr. wolen. >> when did you first alert treasury leadership and irs leadership about this specific audit? >> i alerted commissioner -- then commissioner shulman on may 30, 2012. i subsequently alerted the general counsel of the department of of the the treasury on june 4, and

subsequently -- and i do not have the exact date -- alert it alert it -- alerted deputy secretary neal wolen about this matter and then upon his assumption into the position i mentioned it to secretary lew. >> so may 30 would have been the first time that mr. shulman would have known about the troubling allegations? >> from my perspective. i would assume that people within the internal revenue service would have given him a heads up but i can't say that for certain. >> ok. in your report, you indicate that the decision to target americans based on political beliefs were made only within the irs. how did you determine that?

>> these were through interviews with irs staffers both in cincinnati, ohio, as well as in washington, d.c. at the headquarters of the determinations unit and their -- the exempt organizations unit. >> so did you interview mr. miller? >> we did not interview mr. miller. >> so how would you know -- did you interview anyone at treasury? >> we did not. and the reason for that is because at the time of our interviews we had no indication because this was an ongoing matter and we didn't have any indication from those initial interviews that they were implications in this matter.-- that they were implicated in this matter. >> so had anyone given you any indication that you needed to visit with someone higher, you would have had the authority to do so? >> most definitely. >> time has expired. mr. paulson is recognized. >> there have been a lot of news

reports that this has been a bad week for the president or a bad week for the administration but i will tell you after hearing additional testimony this morning myself that this is a bad week for america. that's the bottom line. and when supposedly neutral actors in our government choose sides and the results end up being highly corrosive to our democracy, this is a violation of the trust of the american people. mr. george, your report indicated and you've testified that the irs improperly required donor lists. that's a concern from the perspective of the pattern of behavior at the irs based on the report from delays of applications and targeting and also the disemination of-- dissemination of confidential information. but how long did the irs -- because you acknowledged this just earlier, from 27 different organizations. how long did the irs have in its possession these improper lists that they shouldn't have had in their possession? >> congressman, they did not

indicate and we did inquire the length of time that they maintained that information but again that they did acknowledge that once they realized they should not have collected it they destroyed it. but i do not have a direct answer as to how long they held on to it. >> do you know how long the improperly-obtained lists were in the irs's possession? >> i don't know. and i looked. they were -- the letters were bad. they were just way too broad. should they have asked for them? probably not. was it bad intent or bad management? my guess and my understanding bad management. when we found out about it, we reached out to people who hadn't sent them yet and we told them don't send them. we went to people who had sent them and told them we're not going to use them unless we need to. and we didn't. and at that point, my understanding is that we did not use them in any of those cases and they're not being retained. they would have been destroyed

in the ordinary course of our records retention rules. >> mr. george were you able to confirm that the lists were actually destroyed? and if so, how were you able to confirm that? >> it's through the testimony, the interviews that were conducted by our auditors. now i have to admit that was not done under oath but we have to go by what we were told by the employees. >> mr. george, do you have any idea how many donors were involved? >> again, 27 is my understanding of the list of donors requeste. so, within the list, i'm not sure. but as i pointed out, 13 of the 27 were from tea party groups. >> ok. mr. miller, let me ask this is it irs practice to ask about a group's relationship with a specific person who is not a part of the organization that is applying for nonprofit status as a part of an application process? >> it can be depending on the facts based on is there a

contractual relationship that could be an issue, is there undue influence going on in some fashion that, for example, we would be looking at private benefit, the one other thing i want you to know that the lists because i want to make it clear. 13 were tea party but i believe, my numbers are just a little different. but the tea party ones include nine, 12 patriots.-- include 9/12 patriots. the listings folks were the minority of the people who got the donor questions. >> i just want to clarify the record there. >> sure. has the irs ever asked the question of an individual what's your relationship with john doe when they ask an organization? is that a common practice? >> i'm sorry? can you rephrase that? >> mr. tiebery was going down a line of questioning earlier about a lengthy process of a questionnaire filed with the

organization and irs had asked a question provide details regarding your relationship with this individual. is that a common practice? does the irs normally do that? >> i don't know what we're talking about there and it's on an individual case and i should not and cannot speak to an individual case, sir.i'm sorry. >> would it be safe to say that knowing that that's probably inappropriate would there be repercussions or some sort of discipline that might be followed up if that was determined to be inappropriate? in that type of a questionnaire? >> it would depend on the context. and i don't have the context and why it was asked and was it -- was it a lack of controls and was it a mistake? or was it something different than that? marchand is.>> mr. recognized. >> mr. miller, let's go back to the irs planned and question issue. when was cecilia rodey told to ask the question?

>> i don't have exact knowledge on that. i did not do that. >> who told her to ask the question? >> i don't know exactly. i'm not sure. it might have been lois but i'm not sure. >> what did you tell her about the background of the issue? >> who? >> rodey. >> i did not have any conversations with cecilia. >> did anyone give her an advanced copy of the ig's report?>> i don't believe so. >> i did not have those conversations but i would be shocked if that happened. >> and how long did she know about the report before the committee knew? >> again, you would have to ask the people who had the conversation but again it would shock me if she knew anything before she had the conversation with whom ever she had it with.

>> on march 28, i wrote the commissioner a letter that basically asked him whether local tea party groups in my district were being harassed or given lengthy questionnaires and were being discouraged from seeking tax exempt status. that was march 28. on june 22, i got a letter from mr. grant that basically gave me a lot of assurances that nothing like that was taking place and that nothing out of the ordinary was going on and that they were following just regular order. then following a time line, shortly after my first letter -- shortly before my first letter mr. bustani asked in a hearing, an oversight hearing if there was anything going on over at irs about these applications. and he was told by the commissioner shulman, i can give you assurances there is absolutely no targeting going on.

following that same time line on july 25th, we had another oversight committee hearing in which commissioner miller and i had an extended conversation about this very subject. and that conversation is in this transcript. anyone can get this on the internet and can read the questions. but the questions were very specifically about tea party groups and their difficulties in getting their tax exempt status, the lengthy conversations that they were having, the questionnaires that they were having to answer, and again mr. miller in that exchange that you and i had i came away from that with i felt the assurances by you and your office that there were no extraordinary circumstances taking place.

and that this was just a backlog and there was nothing going on. mr. miller, was that your impression of the hearing that day? >> no, sir. what i said then and what i understood your question to be was -- again we divide this in two. there is the question of the selection process and what was going on at the time of your question. at the time of your question what was out in the public dome dome -- domain and what i thought we were discussing was the letters. as you called the questionnaires. those were the overbroad letters that had been referred to continuously here. again, i stand by my answer there. there was not -- i did talk about the fact that we had centralized, i believe. i have to take a look at it. but i was talking about the fact that we had fixed that problem. >> but at that time -- you knew by that time that there were lists being made, there were delinaetions, there was-- there

were delineations, there was discrimination going on. and that there were steps being taken to try to correct it. but you knew that it was going on at that time. >> we had corrected it. at that time my assumption was they were going to be done with their report that summer. i was not going to go there because i did not have full possession of all the facts, sir. >> well, this is a list of questions that in my case my local northeast county tea party was sent and it's a list that most taxpayers would not answer and most taxpayers should not have to answer. but it asks questions that should have never been asked. a printed copy of every page of your website, every tweeted from your tweeter account. every personal resume from all your board members. copies of every flier you ever made and every flier any guest speaker ever handed out. explain your relationship with through the vote a copy of every single e-mail ever sent by your

this is a list that is overly burdensome. led to a deep has discouragement on these parties and it has limited their ability to educate the public. can i find out as a member of congress, the groups in my district that have applied for and either been denied or their application continues to be in suspension? >> with some help, you could. granting 6103 authorities. the application process, until it is done, is 6103 information. if it is denied, there are redacted versions going out. it is approved, then everything becomes public. within the constraints of 6103, which can be granted the ability to see, that can happen.

>> i yield back. >> time has expired. >> yes, i think there will be restrictions on me sharing that. >> miss black is recognized for five minutes. >> thank you, mr. chairman. i want to go back to what he said a few minutes ago. as i listen to this testimony and having read the report and multiple sources of information that are now coming out, guy to -- i've got to tell you that the trust -- the trust for the i.r.s. to begin with was already shaky by the american people. i know whenever someone gets any piece of information from the irs it doesn't feel good and they are not confident either before this happens they are going to be treated fairly. what has happened here is -- if i were sitting at home watching this on c-span i would be questioning, again, there

doesn't seem to be clarity here. how can i trust? let me go back to as i'm listening to your testimony and your opening remark, you refer this to as foolish mistakes then you acknowledge there was abuse. mistakes. this was abuse. then you said that the applicants were dealt with fairly. then you turn around and said answering mr. o'neil there was a litmus test was political activity and politicians is-- wetii -- politics is where always ask questions in these kinds of applications. i want to go to page number six. it talks about the words that were used like tea party and patriots and another point in time issues cluing government-- issues including government

spending, debt taxes, public advocates and lobbying to make america better. i want to know if you said, yes, there is a litmus test and politics are always where we ask questions any time there is an application. can you give me some other words that would have been used beside what appears to be all conservative questions.-- questions? was there a progressive -- that we should look for anything in the application that says progressive? was that anywhere? >> so i think what -- i will refer to mr. george's statement, i believe his statement indicated that what my understanding is, which is this was not the only thing that our folks were looking at as they scanned -- >> you're not answering my question. wathis criteria that was outside of what i'm seeing in this report that would have indicated to me

that other than conservative groups who were applying for this status, that you have a word in there anywhere to say, ok, this test and this is political.-- the litmus test is political.to be we always look at political. where is the word progressive? >> i'm not arguing that the list is bad and it is conservative based. >> then i would say it is targeted. you can't have that both ways. that is targeting and there is 16 times in this report that says there was targeting. so i believe that as you're giving this testimony that you can't have that both ways. now, there's also ineffective management that is talked about in this report. even if you get outside of this and say, ok, there was no targeting. i want to know how a couple of employees that are considered low-level could have done what was done here?

because this says to the american people that out of thousands of employees that you have at the irs there sin-- there is ineffective management and nobody is watching this if this was noted in 2010. 2013, we're just finding out about this, that certainly is ineffective management. there should have been somebody overlooking this that said this must stop and i'm going to come back in 30 days to make sure it stops. but it continued and continued and now we have 400 applications, some over three years.ti -- this is more than ineptitude. this is more than just mismanagement. i want to come to you, mr. george. you told ms. jenkins that you told the general council of the treasury on june 4. >> correct. >> you could not recall the exact date that you told the deputy secretary. do you recall if it was soon after informing the general council? a week, a month?

>> i cannot give a time frame but i can say it was shortly thereafter.-- >> it is possible to get that date? >> you feel, i don't keep a date planner but i will do my best. if i have it, i will submit it. >> mr. reed is recognized. i'm sorry, time has expired. >> i'm sorry, thank you, mr. chairman. >> thank you, mr. chairman. mr. miller and mr. george, we have sat here for quite some time and this is offensive. this is offensive to hear this testimony. what i'd like to do -- i know you're disagreeing with the word targeting, mr. miller, the american people will make that determinations and i will give this a name its is the irs targeting game. we're going keep on this until we're done.

as you sit here today -- you were not fired from your job. in my private experience, you would have been fired on the spot. all you were allowed was to resign and retire? now you're come here and somehow try to say i did the honorable thing by falling on my sword when noting in bad is going to happen to you. you're going to get your full benefits and everything associated with your retirement as an irs employee. >> nothing bad is happening to me? >> financially. you're allowed to retire. that is the level of stilltability.you're acting. you came here on the taxpayer dollar. you're getting a paycheck for being here, correct? >> correct. asmr. levin said we need to k the who, what, when, where

, and how. one question he did not put in his opening comment was why? we have dodged and weaved this whole time for the entire hearing as to why this happened? i don't think we're going to get an answer today. but, mr. george, i want to get to the bottom of your report. you reference there is gross mismanagement to regard with this situation.-- in regard to this situation. i want to know who you identified who had the responsibility to mantain this situation. i want names, i want to know where they work, when they work, and what they did? right now. >> lois learner is located in washington. joseph grant was her supervisor. he too was located in washington. located in cincinnati, there were a number of people a a director named holly paz, she was the acting director for a significant period of time this was occurring. there were various management technical units in the like.-- and the like. i can supply a full listing of

those names at your request. >> that is my request. >> i want to make something clear in response to ms. black. when i had my discussions with the commissioner and the secretary and the general council, it was not to inform them of the results of the audit, it was to inform them that we were conducting the make thatst want to clear. >> when you had the conversation with the secretary, when did that occur? >> that happened shortly after he took office. it was after the policy had been stopped and the issues, we hope weolved.-- issues had been, hope, resolved. >> as a country lawyer from new york, you referenced the partisan issues, you said something i've seen many times,

"at this time." that implies to me, there's addition allegations coming down the pipeline that could uncover information. is that correct? >> that is an accurate statement, sir. >> i will be eagerly awaiting those future investigation. i applaud your work and i ask you to continue to do that work. >> there are more earrings ongoing -- hearings ongoing this week. the former irs commissioner will testify wednesday before the house oversight committee, along with lois learner, the irs official who first disclosed the agency targeted tea party shift -- tea party groups applying for tax exempt status. >> next, on "newsmakers," representative chris van hollen. then defense secretary chuck hagel addresses sexual assault in the military.

and later, president obama giving the commencement address today at morehouse college in atlanta. >> we want to welcome back congressman chris van hollen. democrat of maryland, the top democrat on the budget committee. thank you for being here. two reporters with us to ask questions, daniel newhauser and daniel has they first question. >> i wanted to start with the irs. there has been a lot of talk about the scandal. i wonder if you think the firing of certain irs officials is enough to appease the american public or if there is a larger role of congressional oversight. >> i am glad the president acted swiftly to ask for the resignation.